Forging signature, cheque book in hands of wrong people is not the fault on banks end.
Signature verification is an automated process. I do not see the role of bank employees here.
I might be taking a leap of faith and saying that this news has been factored in at the rate of 70.
Just to be clear, Idfcfirst has NOT reimbursed the sum, but it has been recovered.
The bank giving the sum from its books would be admitting a lapse, where one is absent.
Because it’s a small bank.
Had it been SBI or HDFC Bank, the media narrative would be different, or entirely absent.
Transfer of money via cheques is a fool proof system and is consistent with all banks across the nation. Idfcfirst is doing it no different.
The stock exchange filings by IDFC First indicates it paid the money out of its cash to the Govt and “looks forward to recovering its dues”. So there has been no recovery yet
c6af9247-02cf-46df-ac66-01c74b4ce07a.pdf (241.8 KB)
No, it has been paid by the bank to ensure its customer first image and they’ll figure out the fraud and recoveries later.
As shared by someone above, IDFC has confirmed this.
Haryana CM said “recovered” in the context of its own accounts to show people that there’s been no loss to the state govt. He’s not referring to the recovery to IDFC First bank
Payment with interest credited in full to the government account by IDFC Bank- information as sent to the exchanges. Can integrity build long term trust for a business remains to be seen.
There won’t be any BUSINESS left if they keep losing money like this, sirf Integrity bachega….
How branch level emplyees can move 590 crores is beyond any explanation….it is not just a fraud, it shows management don’t know how to run a bank and bank can vanish at any moment in future as it will always be susceptible to this kind of fraud …
good at marketing…. nincompoops at managing the actual business.
Negative news is much more noticed. IDFC bank appears to be using it to come out smelling of roses. Depositors need to be assured that their money is safe and available on call. Compared to earlier string of legacy loan amounts which were sorted out by VV and his team, this is a much smaller sum. If the fraudsters can be prevented to abscond from the country, it may be possible to recover some of the stolen amount. It would depend on the support received from Haryana govt and Central govt.
However the bank should avoid a soft image.
The worry is not about this fraud,
The point is if their systems are so weak that branch level emplyees can move this level of money without being noticed then what is the guarantee that other branches won’t have similar type of discrepancies….what if difference for all branches is at 59000 crores….staff had a free hand to loot as much money as they want to lose in online gaming and FnO afterall 
True.
The bank does come across as responsible.
However, I expect two bad quarters because of this 600 crs lost. Share price is responding negatively, means if the index were to correct below a major support in next few months, this stock could be hammered. Conversely, it is unlikely to lead a rally
.
I think such large sums cannot escape banking channels so r likely to be traced and blockrd
The perpetrators of crime shall get identified and made to disgorge the loot
Some Haryana officials connivance is also inevitable
Monetary loss to bank should be lesser
On the contrary, I dont think the money is coming back….both employees involved in the fraud left their job few months back, their original plan must have been to use this huge amount to earn from FnO trading or something and then return back the money before anyone notices, but they likely blew the money on the markets and realized they couldn’t close the loop, so they just walked away. Once you’re out of the system, there’s no way to fix the books. They would not have left their jobs if they still had the money.
also this is normal in IDFCFIRSTB case as they never make any recovery against the provisions they make….it is always a permanent loss.
You may be correct.
Idfcfirst is doing this for publicity. Now everyone in the stock market universe knows about idfcfirst and its 590 crores.
my theory… if the bank had the intent to compensate the harayana govt in entirety, and the event would cause such damage and shame to the brand if came out in the open, then they would have transferred the sum as a result of their earlier correspondence.
moreover, the story isn’t adding up at all. If original cheque were used, signature was forged by govt staff, then what major role do the bank employees play, for the management to take complete responsibility, plus interest.
There are reports about heavy put purchase prior, and delivery volume spike. The bank indirectly would’ve compensated.
God knows what really happened. But, at the end of the day, Idfcfirst is far more popular post event. Every media source has reported this.
in the past, far worse things have happened in the bank and not a mention.
PS: Stock price up 4%
I personally had a similler experience with my account in icici bank some ten years ago
My wife s account was in Delhi Her kyc data and phone no’s were changed Then a chequebook was issued and chequebook was issued to someone who presented a cheque with obvious mismatched signatures of 8 lacs in Faridabad branch Luckily my staff noticed and we managed to stop payment
A large contingent of bank came when I reported matter to assure that culprits would be nabbed
I don’t know of any substantial action
Debit Transactions and credit card transactions are reported invariably through SMS. In case of large cheque withdrawals ie upwards of 20 lakhs, bank staff calls up on mobile to confirm that you have issued the cheque. That is an additional safety measure before honouring the cheque. What went wrong here. ?
There are apparently four scamsters. Two are iDFC employees, one is employee wife and fourth is wife’s brother. The signatures forged are of the IAS officer incharge who was no longer working there, and messages went to mobile phone of another govt employee.
Apparently all are clever but amateur scamsters. It is not a hardcore international cyber gang. Money reportedly applied into share market and property market. So there is a possibility of some recovery if sincere and result oriented efforts are made by the concerned govt agencies to seize the assets. Bank can sell them to an ARC and move ahead of the episode.
I dont care about the customer first narrative.
Here are my scenarios for what might happen:
1] The fraud is on part of the Government employees (currently it says that its bank employees). If it were Govt employee corruption I dont see how its the banks responibility to take the hit. But if the Govts money was taken by IDFC employees, then it sure is IDFC Firsts responsibility.
If this is proven. The hit has to be taken by the bank. Provisioning will be done. The sum might or might not be recovered in full. So additional provisioning other than the normal one might see the bank bleed into losses for around 2 quarters.
2] What I am more concerned about is the withdrawal of remaining sum from the bank.
The govt departments were ordered to close the accounts and move money out of the bank. Now I read somewhere that the total deposits by the said govt was around 1400Crs.
If this kind of sum goes out of deposits, it might open the floodgates for more. This kind of stress on liquidity is definitely not a positive.
All in all I am confused if theres any light at the end of the tunnel. Exited around 33% of my holding today. Will exit the remaining in a staggered manner since the holding is sizable.
Forensic audit is in progress but I dont really care what it says anymore. Regular audits should have flagged this risk that such large sums can be transferred easily by so called middle level employees without anyone noticing. Any further audit is useless to affect decision making on my part.
Thank you!
Whatever it maybe, now the TOMA of our bank will the through the roof!
I feel that the way the bank handled the issue is commendable. In most cases, banks or NBFCs remain in denial mode, saying that nothing happened, and then later one new layer after another keeps coming out.
IDFC First Bank tried to clean up its image to a large extent by giving an advertisement in the newspaper. Whether that effort will be successful or not, only time will tell.
However, in people’s minds, there is still this question: the money was said to be recovered within 24 hours — but who returned it? This has not been clearly mentioned anywhere.
Hopefully, the bank will further strengthen its security from here, and we will not look back from this point onward.
