No, the Reserve Bank of India (RBI) has stated there is no systemic risk to the banking system. The sector is on strong footing with comfortable capital and liquidity levels.
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IDFC First Bank Fraud: RBI Says Banking System Remains Strong, No Stability Threat
RBI Governor Sanjay Malhotra said the regulator is closely monitoring the situation but there is no broader threat to financial stability.
The governor said India’s banking system is on strong footing, supported by comfortable capital and liquidity levels.
Source : PTI
- RBI reassures no systemic risk to banking system.
- Central bank monitors IDFC First Bank fraud closely.
- Banking system remains strong with adequate capital.
The Reserve Bank of India (RBI) on Monday said there is no systemic risk to the banking system and stressed that the Central Bank does not comment on individual banks or regulated entities, as IDFC First Bank revealed the Rs 590-crore fraud at its Chandigarh branch.
Addressing a joint press conference after a meeting of the RBI’s central board of directors in the national capital, RBI Governor Sanjay Malhotra said the regulator is closely monitoring the situation but there is no broader threat to financial stability.
Responding to a question by IANS on reports related to a Rs 590-crore fraud at IDFC First Bank, Malhotra said the central bank remains vigilant.
“We do not comment on any individual bank or regulated entity. We are watching the developments, and there is no systemic kind of issue over here,” he said.
The briefing was held after Finance Minister Nirmala Sitharaman met the RBI board.
The governor said India’s banking system is on strong footing, supported by comfortable capital and liquidity levels.
Banks currently have a capital adequacy ratio of around 17 per cent, which he described as robust.
He added that even if no fresh capital is infused over the next five years, banks would still be able to meet their capital requirements adequately.
Meanwhile, in an exchange filing last week, the bank said the matter is confined to a set of Haryana government‑linked accounts at the Chandigarh branch, adding that it has informed regulators and filed a police complaint. The bank also suspended four officials pending investigation.
Following the development, stock of the private player hit 20 per cent lower circuit in the early trade on Monday.
During the intra-day session, the stock fell to Rs 66.85, down 20 per cent. The shares opened 10 per cent lower and later extended their losses.
However, it recovered later and around 1:48 pm, the share was trading at Rs 70.40 apiece, down 15.70 per cent on the day.
(Disclaimer: This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
Frequently Asked Questions
Is there a systemic risk to India's banking system?
What is the RBI's stance on the IDFC First Bank fraud?
The RBI is closely monitoring the situation but does not comment on individual banks or regulated entities. They confirmed no broader threat to financial stability.
What is the capital adequacy ratio of Indian banks?
Indian banks currently have a capital adequacy ratio of around 17 percent. This is considered robust and sufficient for future capital requirements.
What did IDFC First Bank say about the fraud?
IDFC First Bank stated the fraud is confined to Haryana government-linked accounts at their Chandigarh branch. They have informed regulators and filed a police complaint.
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