- IDFC First Bank reported unauthorised withdrawals of Rs 590 crore from one branch
- The fraud involved Haryana government accounts and showed signs of employee collusion
- Government deposits are about 8-10% of total deposits, Haryana accounts around 0.5%
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Motilal Oswal Report
IDFC First Bank Ltd. disclosed unauthorized withdrawals of Rs 590 crore from a single Chandigarh branch, involving a defined set of Haryana state government accounts, with prima facie evidence of employee collusion and no systemic failure.
Government deposits form ~8-10% of total deposits, while Haryana balances make up only ~0.5%, limiting the balance sheet risk.
KPMG has been appointed to conduct a forensic audit.
ALSO READ:IDFC First Bank To Claim Rs 35 Crore Insurance After Rs 590 Crore Fraud
In a worst-case scenario of negligible recoveries, provisioning could impact Q4 FY26E PBT by ~56%. The brokerage awaits to get more clarity on these developments and a potential recovery that may possibly happen as the authorities investigate the matter.
Moreover the brokerage will review its numbers during the Q4 preview, and in the interim, and maintain Neutral rating with a revised target price of Rs 80 (1.3x Sep'27E adjusted book value).
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ALSO READ: IDFC First Share Plunge Due To Fraud Case, Not De-Empanelment, Says Bank
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