RBI monitoring IDFC First Bank fraud, sees no systemic risk: Sanjay Malhotra

Core Viewpoint - The Reserve Bank of India (RBI) is monitoring a ₹590 crore fraud at IDFC First Bank, which has led to a 16.2% drop in the bank's stock price, but the RBI does not anticipate any systemic issues arising from this incident [1][9]. Group 1: Fraud Incident - IDFC First Bank reported that employees at its Chandigarh branch were involved in the fraud [2][9]. - Following the fraud report, the bank's stock price fell to ₹70 on the Bombay Stock Exchange (BSE) [1][9]. Group 2: Inflation and CPI Changes - The RBI will release new retail inflation estimates before the April policy review, but the recent changes in the Consumer Price Index (CPI) will not alter the central bank's inflation target of 4% with a tolerance band of two percentage points [2][4][9]. - The revamped CPI, which was released earlier this month, has reduced the share of food items in the inflation basket and introduced new consumption items, with India's CPI inflation reported at 2.75% for January 2026 under the new 2024 series [6][9]. Group 3: Liquidity Measures - The RBI is committed to providing durable liquidity across market segments and has conducted two switch operations totaling ₹1.13 lakh crore for debt management purposes [6][7][9]. - The switch operations involve replacing securities due in the near term with longer-maturity papers, thereby postponing the government's repayment obligations [7][9]. Group 4: Central Bank Digital Currency (CBDC) - The RBI's Central Bank Digital Currency (CBDC) is not intended to replace cash or existing fast payment systems and will be introduced only after a thorough evaluation of its features [8][9]. - The RBI is also working on an offline mode for the digital currency, which is expected to enhance existing payment systems [8][9].