Reacting to the fresh fraud probe at IDFC First Bank, RBI Governor Sanjay 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.”
This comes against the backdrop of an ongoing fraud investigation at IDFC First Bank since 2025, involving alleged loan irregularities worth over ₹1,000 crore. The stock fell sharply, with shares worth nearly ₹1,400 crore changing hands as it tanked up to 20% intraday. Malhotra reiterated that there was “no threat to India’s banking system as a whole,” calling it an isolated case.
India’s RBI Governor Sanjay Malhotra and Finance Minister Nirmala Sitharaman also addressed issues spanning the fraud case, foreign investments, trade negotiations and the central bank digital currency.
Earlier in the day, 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.
IDFC First Bank has no promoter holding as of the December quarter. Mutual funds own 10.9%, insurance companies 10.8%, and the government holds 7.75%. Retail investors, those with authorised share capital of up to ₹2 lakh, hold 15.06%, with 27.9 lakh shareholders on its register.
After plunging as much as 20%, the stock was trading 15.5% lower at ₹70.52 on the NSE at 12:25 IST.
RBI, FM strike cautious tone on rates, trade and CBDC rollout
FM Nirmala Sitharaman and RBI Governor Sanjay Malhotra addressed the media after the customary post-Budget meeting. The duo also addressed issues spanning the fraud case, foreign investments, trade negotiations and the central bank digital currency.
On CBDC, Malhotra said efforts are focused on technical and operational aspects, including enabling offline functionality, and that a large-scale rollout would be premature.
On rates and liquidity, inflation metrics, government borrowing and debt management, both outlined the policy stance ahead.
RBI Governor Malhotra said rate decisions would depend on evolving growth and inflation dynamics, reiterating that liquidity support would remain “pre-emptive and proactive.” He said liquidity would be managed to offset currency leakage, forex intervention and credit-deposit mismatches, and assured continued support as needed.
On inflation, he noted that any change in CPI methodology would be factored into the April policy, adding that the revised series could reduce volatility and improve inflation assessment. However, he clarified that a change in CPI alone does not warrant altering the inflation-targeting framework.
Switching of government securities, he said, is purely a debt management tool, with net borrowings up by ₹20,000 crore. Sitharaman added there was no change in the government’s thinking on such switches.
