Shares of India’s IDFC First Bank slipped 15% on Monday, and were on course for their worst session in six years, after the private lender disclosed suspected fraudulent transactions worth 5.9 billion rupees ($65 million), raising concerns over internal controls and potential earnings impact.
Earlier in the day, the stock hit 70.98 rupees, its lowest since October 6, 2025.
Late on Saturday, the bank said the issue was limited to government-linked accounts at a branch in Chandigarh in northern India, and that it had suspended four staff and ordered a forensic audit.
UBS estimated the suspected amount at about 22% of IDFC First’s fiscal 2026 profit after tax, though it said the capital impact would be limited to around 1% of the bank’s net worth.
Morgan Stanley echoed the view, pegging the potential hit to fiscal 2026 profit before tax at roughly 20%.
Jefferies said the lender will have to reassure investors that the issue had not spread to other clients and that the matter did not appear to be systemic.
($1 = 90.7640 Indian rupees)
Reuters
