IDFC Bank Fraud: ‘No Threat, Keeping Close Watch’ Says RBI Governor

On Monday, the Reserve Bank of India asserted that India’s banking ecosystem faces no systemic risk following IDFC First Bank’s disclosed Rs 590 crore fraud at its Chandigarh branch, while reiterating its long-standing stance of not commenting on specific lenders or regulated entities.

“We do not comment on any individual bank or regulated entity,” RBI Governor Sanjay Malhotra stated in his response to a query on the fraud.

He adds, “We are watching the developments, and there is no systemic kind of issue over here.”

Addressing a media briefing after the RBI’s Brass meet in the national capital, Malhotra said the regulator is closely tracking developments.

He also underlined that there is no larger financial stability concern at play.

The press interaction followed a meeting between the RBI board and Finance Minister Nirmala Sitharaman.

Emphasising the resilience of the banking sector, Malhotra stated that Indian banks remain well-capitalised and liquid.

He noted that the capital adequacy ratio currently stands at around 17 per cent, describing it as strong.

He further stated that banks can adequately meet their capital requirements over the next five years even without fresh capital infusion.

In a fresh disclosure, the lender clarified that the malpractice affected only certain Haryana government accounts at its Chandigarh branch.

It informed regulators, filed a police complaint and suspended four employees pending investigation.

On Monday, the bank’s shares came under heavy selling pressure, hitting the 20 per cent lower circuit in early trade.

The stock fell to ₹66.85 before recovering slightly to ₹70.40 by 1:48 PM, still down 15.70 per cent.

Also Read: 14,438 Cr Wipes Out: IDFC First Bank Share Dips Sharply As Market Opens, Know What Is Troubling Investors?