What IDFC First Bank management said in today's concall

IDFC First Bank Ltd MD and CEO V Vaidyanathan in a concall on Monday morning said the bank would scan every nook and corner for any process gaps or employee-collusion fraud and would make the necessary amendments to contain them. Vaidyanathan, as per the concall audio recording available with NDTV Profit, said he had discussions with employees across the country last night, who informed him they were holding the fort very well.

Based on a preliminary internal assessment, upon receipt of communication from a particular Department of Government of Haryana, IDFC First Bank has identified an incident involving unauthorised and fraudulent activities by certain employees at a particular branch in Chandigarh. 

Calling it an isolated case, Vaidyanathan said the bank has opened over 1,050-1,060 branches cumulatively in the past five years and has not seen this incident of this nature.  The bank is dealing with the matter clearly, ethically, decisively and transparently, Vaidyanathan as per the audio recording said, adding that there is a strong degree of confidence. He said the board has taken up the matter and given some guidance.

Vaidyanathan became MD and CEO of IDFC First Bank in December 2018 following the merger of Capital First with IDFC Bank.

Vaidyanathan's comments came as four suspected bank officials have been placed under suspension pending investigation. "The bank will pursue strict disciplinary, civil and criminal action against the employees and other external individuals responsible, in accordance with applicable law," the bank said in a filing on Sunday. 

The alleged fraud came into light after the bank received a request from a particular Department of Haryana Government for closure of its account and transfer of funds to another bank. As per the bank, differences were observed between the balances in the account and the balances as mentioned by the said Haryana Government entities holding accounts with the bank, amounting to Rs 590 crore. 

"The impact may be determined based on receipt of further information, validation of claims, recoveries of any nature including those made through the process of marking lien on fraudulent beneficiary accounts maintained with other Banks, liabilities of other entities involved in the fraudulent transactions, and the legal recovery process," IDFC First Bank said in an exchange filing. 

As per the IDFC First management, this will be pass through profit & loss account, as and when it comes.

The bank, meanwhile, has appointed KPMG to initiate an independent forensic audit in the matter.

As per ET Now, the bank said it has filed a police complaint and the recovery process has started already. No senior management personnel was involved and that the bank is in full control and the transactions will continue smoothly.