There was a stir in the stock market after the case of alleged fraud of Rs 590 crore in the Chandigarh branch of private sector IDFC First Bank came to light. This news also affected the bank’s shares and it closed at Rs 70.04 with a sharp fall of 16.18% on BSE, due to which investors had to suffer huge losses.
What is the whole matter?
IDFC First Bank informed the stock exchange that some employees in a branch in Chandigarh made transactions without permission in some accounts linked to the Haryana government. According to the bank, this problem is limited to only a few government accounts and has not affected the accounts of common customers. A difference has been found in transactions worth Rs 590 crore, which is under investigation. The bank has started investigating the matter and has said that strict action will be taken against those found guilty as per law. Also, every effort will be made to bring back the money that has gone wrong.
What did CM Naib Saini say?
On this matter, Haryana Chief Minister Nayab Saini informed in the House that IDFC First Bank has written a letter to SEBI admitting that irregularities have been committed by some employees of the bank. He said that the state government is seriously investigating the issue. The Leader of Opposition has also raised this issue in the House. The Chief Minister made it clear that whether anyone is a government official or a bank employee, if found guilty, strict action will be taken against him. He also said that around 450 FDs were created in the bank and every single penny would be brought back. The government got information about this matter about 4-5 days ago, after which the investigation was started immediately. At present the Anti Corruption Bureau is investigating this entire matter and after the completion of the investigation, strict action will be taken.
What does RBI say?
The Governor of the Reserve Bank of India has clarified that there is no systemic threat regarding this incident and the regulator is keeping an eye on the situation. That is, at present there is no threat to the entire banking system.
Are your FD and savings safe?
An important safeguard for depositors in India is the insurance of the Deposit Insurance and Credit Guarantee Corporation (DICGC). Under this, a maximum amount of Rs 5 lakh (principal + interest) per depositor, per bank is insured. This includes Savings Account, Fixed Deposit (FD), Recurring Deposit (RD) and Current Account. Keep in mind, this limit applies per bank. That is, if you have accounts in different banks, then separate insurance cover up to Rs 5 lakh is available in each bank. However, insurance is not applicable on deposits above Rs 5 lakh. In such a situation, what will happen to the amount more than Rs 5 lakh will depend on how strong the condition of the bank is and what further decision the regulator (RBI) takes.
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