Mumbai: On Monday, RBI Governor Sanjay Malhotra asserted that the IDFC First Bank's fresh fraud probe poses "no systemic risk" to India's banking sector. This comes against the backdrop of an ongoing fraud investigation at IDFC First Bank since 2025, involving alleged loan irregularities worth over Rs 1,000 crore. The stock fell sharply, with shares worth nearly Rs 1,400 changing hands as it tanked up to 20 percent intraday.
RBI Governor Malhotra called it an isolated case and reiterated that there was "no threat to India's banking system as a whole." FM Nirmala Sitharaman and RBI Governor Malhotra addressed the media after the customary post-Budget meeting. According to CNBC, the duo also addressed issues spanning the fraud case, foreign investments, trade negotiations, and the central bank digital currency.
The Bank's management said the incident was confined to a single branch and customer, and that internal checks and balances were intact. It has appointed KPMG to conduct an independent forensic audit. The IDFC First Bank's stock plunged 20 percent. It was trading 15.5 percent lower at Rs 70.52 on the NSE at 12:25 pm IST. Commenting on the fresh fraud probe at IDFC First Bank, RBI Governor Malhotra said," As a policy, we do not comment on any individual bank or regulated entity. We are watching the developments. There's no systemic risk here."
RBI Governor Malhotra maintained official policy by declining to comment on the specific details of the regulated entity's internal investigation. The central bank is closely monitoring developments.
