IDFC Bank fraud: No systemic risk here, we’re watching developments, says RBI Governor
RBI stated there is no systemic risk to the banking system following a Rs 590-crore fraud at IDFC First Bank’s Chandigarh branch. Four officials were suspended; the stock fell sharply amid ongoing investigation
New Delhi: The Reserve Bank of India (RBI) on Monday said there is no systemic risk to the banking system and stressed that the Central Bank does not comment on individual banks or regulated entities, as IDFC First Bank revealed the Rs 590-crore fraud at its Chandigarh branch.
Addressing a joint press conference after a meeting of the RBI’s central board of directors in the national capital, RBI Governor Sanjay Malhotra said the regulator is closely monitoring the situation but there is no broader threat to financial stability.
Responding to a question by IANS on reports related to a Rs 590-crore fraud at IDFC First Bank, Malhotra said the central bank remains vigilant. “We do not comment on any individual bank or regulated entity. We are watching the developments, and there is no systemic kind of issue over here,” he said.
The briefing was held after Finance Minister Nirmala Sitharaman met the RBI board. The governor said India’s banking system is on strong footing, supported by comfortable capital and liquidity levels.
Banks currently have a capital adequacy ratio of around 17 per cent, which he described as robust.
He added that even if no fresh capital is infused over the next five years, banks would still be able to meet their capital requirements adequately. Meanwhile, in an exchange filing last week, the bank said the matter is confined to a set of Haryana government‑linked accounts at the Chandigarh branch, adding that it has informed regulators and filed a police complaint.
The bank also suspended four officials pending investigation. Following the development, stock of the private player hit 20 per cent lower circuit in the early trade on Monday.
During the intra-day session, the stock fell to Rs 66.85, down 20 per cent. The shares opened 10 per cent lower and later extended their losses. However, it recovered later and around 1:48 pm, the share was trading at Rs 70.40 apiece, down 15.70 per cent on the day.
