Mumbai, February 2026 —The Indian banking sector was hit by a major shock on Monday, February 23rd, as IDFC First Bank shares plummeted by more than 16% after the lender disclosed a massive fraudulent transaction. The bank uncovered a scam worth approximately ₹590 crore at its Chandigarh branch, triggering a wave of panic selling that erased significant market value in a single session.
With the bank now facing police investigations and regulatory scrutiny, investors are weighing the long-term impact on the lender’s profitability and public trust.
The ₹590 Crore “Shadow” on Earnings
The scale of the fraud has raised immediate alarms among financial analysts. The discovered loss is nearly equivalent to six months of the bank’s net profit, raising serious concerns about the sustainability of its earnings. This discovery comes at a delicate time, as the bank’s Q3 FY26 results had already shown flat net profit growth and margins pressured by rising costs.
In response to the discovery, IDFC First Bank has:
- Formally informed the Reserve Bank of India (RBI) of the fraudulent activity.
- Filed a complaint with the police and is in the process of involving further law enforcement agencies.
- Initiated reporting to all relevant authorities to mitigate systemic risk.
Technical Breakdown and Market Panic
The stock price action on Monday was described by market experts as a “structural breakdown” rather than normal profit booking.
- The Crash: The stock opened at ₹75.21 and crashed 20% to an intraday low of ₹66.85 before settling at ₹70.04.
- Technical Weakness: The stock is currently trading below all major exponential moving averages (20, 50, 100, and 200 EMAs), confirming a bearish trend.
- Oversold Territory: The Relative Strength Index (RSI) stands at 23.83, indicating heavily oversold conditions following the panic distribution.
The Haryana Government Outflow Risk
Adding to the bank’s woes is a potential liquidity drain. Global brokerage firm Macquarie highlighted that government deposits form a significant portion of IDFC First’s base. Following the news, the Haryana government has reportedly decided to stop transactions through the bank. Analysts estimate a potential outflow of roughly ₹20 billion (₹2,000 crore) as a direct result of this decision.
Bottom Line
The earlier support zone of ₹81–₹83 has now flipped into a strong supply area, meaning any price recovery will likely face immediate selling pressure. For now, the stock remains in a “wait and watch” phase. Investors will be looking for clarity from the upcoming forensic audit and evidence of price stability above the psychological ₹80 mark before considering a constructive view.
