New Delhi | February 23, 2026 | SKY LINK TIMES
IDFC First Bank ₹590 Cr Fraud:
The Reserve Bank of India (RBI) on Monday assured that the ₹590-crore fraud reported by IDFC First Bank poses no systemic risk to India’s banking system. RBI Governor Sanjay Malhotra said the central bank is closely monitoring developments but emphasized that financial stability remains intact.
The statement came during a press conference held after a meeting of the RBI’s central board in New Delhi, shortly after the fraud disclosure triggered sharp volatility in the bank’s stock.
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RBI: “No Broader Threat to Financial Stability”
Responding to media queries regarding the ₹590-crore fraud at IDFC First Bank’s Chandigarh branch, Governor Malhotra clarified that the RBI does not comment on individual banks or regulated entities.
“We are watching the developments, and there is no systemic kind of issue over here,” he said.
The briefing followed a meeting between the RBI board and Union Finance Minister Nirmala Sitharaman.
Malhotra further highlighted the strength of India’s banking sector, stating that banks currently maintain a capital adequacy ratio of around 17%, which he described as robust. He added that even without fresh capital infusion over the next five years, banks would be able to meet regulatory capital requirements comfortably.
What Happened at IDFC First Bank?
In a regulatory filing last week, IDFC First Bank disclosed that the fraud amounting to ₹590 crore was confined to certain Haryana government-linked accounts at its Chandigarh branch.
The bank has:
• Informed regulators
• Filed a police complaint
• Suspended four officials pending investigation
The lender clarified that the issue is isolated and under active internal and external scrutiny.
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Market Reaction: Shares Hit 20% Lower Circuit
Following the disclosure, IDFC First Bank shares witnessed heavy selling pressure on Monday.
The stock hit a 20% lower circuit, falling to ₹66.85 during intra-day trade.
It opened 10% lower and extended losses through the session.
By 1:48 pm, the stock recovered partially to ₹70.40, still down 15.70% for the day.
The sharp fall reflects investor concerns, though RBI’s assurance of no systemic risk helped stabilize broader market sentiment.
Is India’s Banking System Safe?
According to the RBI, India’s banking system remains on strong footing, supported by comfortable capital buffers and adequate liquidity levels. The central bank’s reassurance indicates that the issue is institution-specific and does not threaten wider financial stability.
Market participants will now closely watch regulatory investigations and any further disclosures from IDFC First Bank.
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