New Book Value Per Share = ₹46,030 / 859.8 = ₹53.53
Interestingly, the fraud only erodes the Book Value by about 1RS per share (less than 1%). However, due to corporate governance lapse if market punish the stock and it trades from 1.5 to new 1.2 book value then stock could slide to 62-63 level ??
this seems to be a collusion between bank employee and some govt employee and logically both should lose , but yes 590 crore could be a possible risk in Q4 now
Apart from calculations, it is the image of the bank which will take a hit. VV has always mentioned that they are building an ethical bank etc etc. Corporate governance, risk control, audit measures everything comes into spotlight now. And what we all have seen in banking it is never a single cockroach in the closet. Many more can come out now.
Have been a Yes Bank customer and shareholder and didn’t take timely action to transfer out life term earnings and savings money from the account, ended up getting it locked up by RBI for a month or more. Will closely watch out this fraud for more cockroaches in the closet.
Disc: Exited position in IDFC first recently. Holding a good amount in savings account due to higher interest rate.
It’s not just Rs 590 cr (or whatever the final amount is) but the cascading impact of that on Capital Adequacy.
CET 1 was around Rs 45,305 cr at 14.23% and this impact will bring CET1 down substantially by 1.3%. Given that the ROE is subpar thus eating CET 1 ratio faster with higher growth, this 1.3% sudden drop will put additional pressure on CET1 ratio. So either lending will have to slow down or capital raise will have to be quicker.
This stock is now getting infamous for periodic shocks. When things look rosy, some event happens and rocks the boat heavily. Market is punishing the stock today and brutally
Next two quarters, I expect poor net profit reporting. While, other parameters are expected to remain. Unless, depositor become seriously disenchanted, and CASA growth stops, there should be not much else to worry about.
There is soon going to be an RBI audit. Till then it’s difficult to predict price movement.
AU Small Finance Bank on Government of Haryana Bank account related suspicious activity and de‑empanelment of itself (AU SFB) for Government business in the State of Haryana.
transaction(s) can be done at branch level. However when transactions of huge values or when a branch loses deposits worth crores, HQ/Regional offices (should) take notice the next day.
Net Worth - 46,029 Cr (as of Dec 2025)
OS = 859.9Cr
Book value per share is 53.5
Fraud is 590 Cr = approx 600 Cr (Some of it is recoverable)
New net worth is 46,029-600= 45,429 Cr ~ 45,000 Cr approx.
Book value per share: 45,000/859.9 = 52.33 INR per share
Any investment is always about risk:reward.
Buffet rule: Buy under 0.8X, sell over 1.2X
0.8x BV = 41.6 INR approx
1.2x BV = 63 INR approx
Waiting for further blood bath to continue. Peace out!!
How are they so confident the issue is confined to certain branch when existing controls failed to flag it? The timing of this concall (8 AM) was to restrict the stock price fall by such meaningless words.
In concall Vaidyanathan said that fraudsters used forged cheques to transfer the money and multiple accounts of multiple clients/departments were affected…
Now chequebooks are with clients, so either emplyees of multiple departments were involved in this fraud along with employees of the bank or bank employees printed their own cheque books from a local press …
Here is a summary of the IDFC First Bank conference call held on February 23, 2026, regarding the fraud incident reported in the press release.
Executive Summary
IDFC First Bank convened an urgent investor call to address a fraudulent incident involving Haryana government accounts at a single branch in Chandigarh . Management characterized this as an isolated case of employee collusion with external parties involving forged manual transactions . The bank has estimated a maximum potential financial impact of INR 590 crores but assured investors that the bank’s underlying core profitability and capital adequacy remain strong enough to absorb this hit in Q4 .
1. The Incident: Nature and Scope
The Fraud: The issue involves the fraudulent transfer of funds from Haryana government accounts to suspicious third-party beneficiaries .
Mechanism: This was not a cyber/digital breach. It was a manual fraud involving forged cheques and debit instructions executed through the collusion of branch employees and external parties .
Location: The incident is strictly confined to one specific branch in Chandigarh .
Discovery: The fraud surfaced around February 18, 2026, when the Haryana government requested fund transfers, revealing discrepancies between their records and the bank’s balances .
2. Financial Impact Assessment
Total Estimated Hit:INR 590 Crores .
INR 490 Crores: The discrepancy identified from reconciliation requests received so far .
INR 100 Crores: An additional buffer proactively estimated by the bank after self-scanning other relevant accounts .
Mitigation: The bank holds an Employee Dishonesty Insurance policy of approximately INR 35 crores, which may offset a small portion of the loss .
Profitability: Management expects the bank to remain profitable in Q4 despite this provision. Operating profit has crossed 2% (up from 0.5%), and Net Interest Margins (NIM) are expected to be around 5.8% .
Deposits at Risk:
Haryana government deposits constitute only 0.5% of the bank’s total deposits .
Since the news broke, the bank has seen an outflow of approximately INR 200 crores, which is deemed manageable against a total deposit base of INR 2.8 lakh crores .
3. Management Response & Risk Control
Immediate Action: Suspected employees have been suspended, police complaints filed, and recovery/lien marking initiated across the banking system .
Forensic Audit:KPMG has been appointed to conduct a forensic audit, with results expected in 4–5 weeks .
Process Improvements:
Mandatory Digital Confirmation: The bank will implement a system requiring customer confirmation via digital channels for high-value branch transactions .
AI Verification: Artificial Intelligence will be introduced to assist in signature verification for physical cheques to prevent future forgery .
4. Investor Q&A: Key Concerns Addressed
Concern
Management Response
Systemic Risk
The bank emphasized this is an isolated incident involving one client group at one branch. No similar issues have been found across the other 1,000+ branches .
Contagion
No other state governments or large clients have raised concerns or communicated plans to pull funds. Relationships with government entities remain deep and integrated .
Liability
While the bank has put out the INR 590 crore number as a conservative “outer limit,” they noted that if counterparty negligence or third-party liability is established, the actual financial hit could be lower. However, they are prepared to provision for the full amount if necessary .
Growth Impact
Management does not expect this to impact deposit growth or cost of funds significantly. They cited the bank’s strong brand, service levels, and diverse retail deposit base as buffers .
5. Key Takeaways for Investors
One-Time Hit: The financial impact is significant (approx. INR 590 Cr) but appears to be a one-off “clean-up” event rather than a structural failure of the bank’s digital systems .
Business Continuity: Core operating metrics (NIMs, Operating Profit) are on an upward trajectory, providing a cushion to absorb this loss without slipping into a net loss for the quarter .
Transparency: The management’s decision to proactively recognize an additional INR 100 crore loss buffer and hold this call immediately suggests a desire to “ring-fence” the bad news and move forward .
Watch List: Investors should monitor the Q4 results for the final provision number and the outcome of the KPMG audit (expected in roughly one month) for any further revelations.
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