IDFC First Bank shares slide after Rs 590 crore fraud; Arun Kejriwal advises caution, recalls IndusInd episode

Shares of IDFC First Bank Ltd slumped in Monday's trade after the private lender disclosed a fraud of around Rs 590 crore involving certain Haryana government-linked accounts operated through a branch in Chandigarh. Market veteran Arun Kejriwal advised investors to remain cautious, citing the example of the challenges faced by IndusInd Bank Ltd last year.

IDFC First Bank stated that the incident is isolated to a specific group of government-linked accounts and does not extend to other account holders. The lender has initiated an investigation, suspended four officials pending the outcome of the probe and referred the matter to the Special Committee of the Board for Monitoring and Follow-up of Cases of Fraud.

Reacting to the issue, Kejriwal told Business Today, "What has happened is shocking. One is reminded of what we kept hearing about IndusInd Bank — its corporate governance issues, concerns around forex trading and the way it was accounting. More importantly, the lesson was that the bank kept giving news and information, but the market refused to believe it. The stock remained under pressure for a good 8 to 12 months. I believe the impact you have seen today in the price reflects the market's perspective. You may now see customers closing their accounts and withdrawing their money. There could be systemic or procedural lapses in some corporate accounts where such incidents take place. Now, the integrity of the bank will be under question. I believe it is time for IDFC First to step out and restore customer confidence before the issue starts steamrolling."

When asked about the course of action for retail investors, he said, "If you are looking at it from an investment perspective, please avoid it for now, as one does not know what further implications may emerge — whether the funds moved out of the bank to other accounts are traceable, what the status of those accounts is, and whether a detailed investigation into those leads could result in further ramifications or more people being involved in the network. Risks remain high. Do not sink into it at this stage."

The commentary comes against the backdrop of developments at IndusInd Bank last year. In 2025, the lender flagged lapses exceeding Rs 1,530 crore in its forex derivatives portfolio, a disclosure that dented investor sentiment and kept the stock under sustained pressure for months.

With that being said, Nuvama Institutional Equities revised its ratings on several firms, including IndusInd, following the December quarter (Q3) earnings season. In the BFSI pack, the domestic brokerage upgraded IndusInd from 'Reduce' to 'Hold'.