IDFC First Bank

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IDFC First Bank (stylised as IDFC FIRST Bank) is an Indian private sector bank based in Mumbai. Founded in 2015 as a banking subsidiary of IDFC Limited, it shifted focus from infrastructure financing to retail banking after its 2018 merger with Capital First.[1] In 2024, IDFC First Bank took over the parent company IDFC Limited in a reverse merger.[2]

History

IDFC Limited was set up in 1997 by Government of India to finance infrastructure projects in India.[3] With time, the company diversified into asset management, institutional broking and investment banking.

In 2005, The Government of India and IDBI Bank, a public sector bank were the sponsor shareholders of IDFC. The government brought down its stake to 34.91% through IDFC's initial public offering in 2005.[4]

In 2014, the Reserve Bank of India granted in-principle approval to IDFC Limited to set up a new bank in the private sector.[5] Following this, the IDFC Limited divested its infrastructure finance assets and liabilities to a new entity - IDFC Bank. The bank was launched through this demerger from IDFC Limited, and it was officially inaugurated by the Prime Minister of India Narendra Modi in October 2015.[6][7]

IDFC Bank started operations on 1 October 2015.[8][9] The parent entity, IDFC Limited, retained the asset management, institutional broking and infrastructure debt fund businesses through IDFC Financial Holding Company Limited (IDFC FHCL).[10]

IDFC Bank faced challenges due to bad loans from legacy infrastructure accounts. A planned merger with the Shriram Group was called off. By September 2017, the bank's deposits totaled Template:INR38,890 crore, with a CASA ratio of just 8.2%.[11]

Capital First merger

In January 2018, IDFC Bank and MSME financing company Capital First announced a merger.[12] Capital First was founded as Future Capital Holdings under the Future Group, and was acquired by Warburg Pincus and V. Vaidyanathan in 2012.[13][14] As per a September 2017 stock filing, Capital First had a retail loan portfolio of Template:INR229.7 billion.[15] 139 shares of IDFC Bank were issued for every 10 shares of Capital First as part of the merger share swap.[16]

The merger completed in December 2018, with IDFC Bank changing its name to IDFC First Bank.[17][18] Vaidyanathan took over as the MD and CEO of the merged entity. The Reserve Bank of India approved his appointment for a period of three years, effective from 19 December 2018.[19]

The bank transitioned from infrastructure financing to retail banking in four years since the merger. Its CASA ratio increased from 8.6% to 49.77% and retail deposits went up from 27% to 76% of total deposits, as of March 2023.[20][21]

IDFC Limited merger

In July 2023, the board of the bank approved the merger with IDFC Limited.[22][23] After receiving clearance from the Competition Commission of India[24] and the Reserve Bank of India,[25] the merger proposal was approved by the National Company Law Tribunal in May 2024. The proposal, endorsed by the bank's shareholders and NCD holders, involved two steps–IDFC FHCL merging with IDFC Limited, followed by IDFC Limited merging into IDFC First Bank.[26][27]

On 1 October 2024, IDFC Limited merged with the bank.[28] As a result of the merger, 155 equity shares of the bank were allotted for every 100 equity shares of IDFC Limited held by each shareholder in the latter.[29]

Shareholding

On 22 February 2023, IDFC Limited announced that it would increase its stake in the bank from 36.38% up to 40%.[30] Also, on 22 February 2023, the bank issued 12,03,745 equity shares to its employees under the company ESOP plan.[31]

On 12 September 2023, US-based GQG Partners acquired a 0.76% stake from V. Vaidyanathan, increasing its ownership in the bank to 3.36%.[32][33]

In July 2024, Life Insurance Corporation raised its stake in the bank to 2.68%.[34]

In May 2025, Warburg Pincus initiated the acquisition of a 10% stake by seeking approval from the Competition Commission of India.[35][36] However, the institutional shareholders rejected the proposal to grant the group a board seat.[37]

Operations

File:IDFC First Bank Prabhadevi Branch.jpg
A branch of IDFC First Bank in Prabhadevi, Mumbai

As of November 2022, the bank had 809 branches, 249 asset service centres, 925 ATMs, and 606 rural business correspondent centres across the country.[38][39][40]

Products and services

File:IDFC First Bank HSR Layout Sector 1 Branch.jpg
A branch of IDFC First Bank in HSR Layout, Bangalore

The bank provides products and services related to retail banking, wholesale banking and investment banking.[41][42][43][44]

In 2017, IDFC Bank launched an Aadhaar-linked cashless merchant solution.[45][46]

The bank became a member of the Open Network for Digital Commerce in September 2022. Subsequently, it began enrolling small merchants, who are existing customers with current accounts, onto a partner application registered with ONDC.[47][48] In 2023, it launched central bank digital currency under the guidance of the RBI.[49]

IDFC First Bank operates in Gujarat International Finance Tec-City (GIFT City), India’s international financial services centre in Gandhinagar, Gujarat, regulated by the International Financial Services Centres Authority[50]. In December 2025, the bank introduced a foreign currency savings account for non-resident Indians through its GIFT City branch, enabling deposits in currencies such as US dollars and euros.[51] The bank also offers foreign currency fixed deposits and corporate banking services, including trade finance and cross-border transactions.[52]

Rural lending

The bank's rural lending portfolio consists of 60% women borrowers, as of October 2023.[53] The portfolio has a gross NPA of 1.2% and a net NPA of 0.3%.[54]

In South and Central India, the rural lending is led by IDFC First Bharat Limited (IFBL) which traces its roots to Grama Vidiyal, a Tamil Nadu-based public charitable trust established in 1986. In 2003, it became a microfinance institution called Grama Vidiyal Micro Finance Limited (GVMFL). In 2016, IDFC Bank acquired GVMFL, turning it into a wholly owned subsidiary of the bank.[55][56] GVMFL later became known as IDFC First Bharat Limited.[57]

Financials

In the financial year 2024, the bank had a capital adequacy ratio of 16.82%.[58] As of 30 September 2024, the overall gross non-performing asset (NPA) ratio is 1.92%, while the net NPA ratio is 0.48%.[59]

In 2023, it became one of the top 10 banks in India by market capitalization.[60][61]

Sponsorships

In 2023, the bank obtained the title sponsorship rights for all Board of Control for Cricket in India's international and domestic home matches.[62][63]

Philanthropy

Under bank's employee-funded Ghar Ghar Ration program, the bank employees will supply ration kits to 50,000 low income customers whose livelihoods has been impacted by the pandemic.[64] As many as 16,000 beneficiaries have been reached across Rajasthan, Madhya Pradesh, Maharashtra, Odisha, Gujarat, Karnataka, Haryana, Tamil Nadu, Andhra Pradesh, and Chhattisgarh under this program. The lender has also identified 250 vulnerable families who have lost an earning member of their family to COVID-19 with a cash relief support of ₹10,000 in a partnership with 'Give India'.[65]

Controversies

In February 2026, IDFC First Bank reported a suspected fraud of approximately ₹590 crore at its Chandigarh branch. The discrepancy involved accounts linked to departments of the Government of Haryana.[66] The issue came to light during a reconciliation process initiated when a government department requested closure of its account.[67]

See also

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References

  1. ↑ 7 things to know about IDFC Bank | Business Standard News. Business-standard.com(2015-10-01). Retrieved 2016-10-15.
  2. ↑ IDFC FIRST Bank announces completion of IDFC Ltd merger. Mint(28 September 2024). Retrieved 3 March 2025.
  3. ↑ Insolvency and Bankruptcy Code (IBC) and Long-Term Bulk Lending in India{{#if:Bhagwati|, Bhagwati}. Centre for Social and Economic Progress, New Delhi(January 2022)
  4. ↑ Government may sell stakes in IDFC, Tata Communications via ETF route. The Economic Times(2015-04-22). Retrieved 2025-03-03.
  5. ↑ RBI grants in-principle approval to IDFC, Bandhan for new bank licences. The Economic Times. Retrieved 2022-12-12.
  6. ↑ Narendra Modi inaugurates IDFC Bank, talks of banking reforms, PTI. mint(2015-10-19). Retrieved 2022-12-12.
  7. ↑ PM inaugurates IDFC Bank | Business Standard News. Business Standard India(2015-10-19). Retrieved 2016-10-15.
  8. ↑ IDFC Bank to start operations from Oct 1 | Business Standard News. Business Standard India(2015-07-25). Retrieved 2016-10-15.
  9. ↑ IDFC Bk to start ops with few branches by Oct 1: Rajiv Lall. Moneycontrol.com(2015-04-12). Retrieved 2016-10-15.
  10. ↑ IDFC can exit as promoter of IDFC First Bank, clarifies RBI, Gopakumar, Gopika. mint(2021-07-21). Retrieved 2022-12-12.
  11. ↑ IDFC Bank, Capital First merger: will the shoe fit this time?. Mint(15 January 2018). Retrieved 29 October 2024.
  12. ↑ Need for Setting Up of a New Development Bank (RIS-DP #254){{#if:Tadas|, Tadas}. Research and Information System for Developing Countries(August 2020)
  13. ↑ Future Group sells Future Capital Holdings to Warburg Pincus for Rs 800 cr. The Economic Times(5 June 2012). Retrieved 12 December 2024.
  14. ↑ V. Vaidyanathan takes wing with a $17 million stake in a star NBFC, Kalbag, Chaitanya. Business Today(2012-07-03). Retrieved 2023-08-03.
  15. ↑ IDFC Bank to merge with Capital First, Vaidyanathan to succeed Lall. Business Standard(13 January 2018). Retrieved 29 October 2024.
  16. ↑ IDFC Bank to take over Capital First in share swap deal, sundarajan, Priya. www.thehindubusinessline.com(2018-01-13). Retrieved 2022-12-12.
  17. ↑ IDFC, Capital First completes merger process to form IDFC First Bank. The Economic Times.
  18. ↑ Capital First merges with IDFC Bank to create IDFC First Bank. Moneycontrol(18 December 2018). Retrieved 2022-12-12.
  19. ↑ RBI approves appointment of V Vaidyanathan as MD, CEO of IDFC First Bank. Moneycontrol(18 January 2019). Retrieved 2022-12-12.
  20. ↑ IDFC FIRST Bank FY23 Profit After Tax Highest-Ever at Rs. 2,437. Bloomberg.com(2023-05-02). Retrieved 2023-06-21.
  21. ↑ IDFC First Bank's transformation to retail complete; NPA woes behind, says CEO V Vaidyanathan. The Economic Times. Retrieved 2022-12-12.
  22. ↑ India's IDFC to merge with IDFC First Bank in latest consolidation. Reuters(2023-07-03). Retrieved 2023-07-04.
  23. ↑ IDFC to merge with IDFC First Bank. The Hindu(2023-07-03). Retrieved 2023-07-04.
  24. ↑ IDFC gets CCI nod for merger with IDFC First Bank, Livemint. mint(2023-10-17). Retrieved 2023-10-25.
  25. ↑ IDFC First Bank Gets RBI Nod For Merger Of IDFC, IDFC Financial Holding With Self, Bhattacharya, Shubhayan. NDTV Profit(2023-12-18). Retrieved 2023-12-26.
  26. ↑ Debt, equity holders approve merger of IDFC with IDFC First Bank, PTI. BusinessLine(2024-05-18). Retrieved 2024-06-25.
  27. ↑ Majority shareholders of IDFC First Bank approves amalgamation of IDFC Ltd with lender. Business Today(2024-05-18). Retrieved 2024-06-25.
  28. ↑ IDFC FIRST Bank announces completion of IDFC Ltd merger. Financialexpress(2024-09-27). Retrieved 2024-10-15.
  29. ↑ IDFC First Bank completes merger with IDFC Limited - CNBC TV18, Deshpande, Swapnil. CNBCTV18(2024-09-27). Retrieved 2024-10-15.
  30. ↑ IDFC Ltd to invest Rs 2,200 crore in IDFC First Bank, up its stake to 40%, Reporter, B. S.. www.business-standard.com(2023-02-01). Retrieved 2023-02-23.
  31. ↑ IDFC First Bank allots shares worth Rs 1.2 cr to employees as stock options. Free Press Journal. Retrieved 2023-02-23.
  32. ↑ IDFC First Bank rises 2% on Rs 479.5-cr block deal with GQG Partners. Moneycontrol. Retrieved 2023-09-14.
  33. ↑ US-based GQG Partners ups IDFC First Bank stake, acquires shares from CEO V. Vaidyanathan. www.telegraphindia.com. Retrieved 2023-09-14.
  34. ↑ LIC raises stake in IDFC First Bank to 2.68%. The Hindu(2024-07-04). Retrieved 2024-10-29.
  35. ↑ Warburg Pincus seeks CCI approval to buy 10% stake in IDFC First Bank. www.business-standard.com. Retrieved 2025-05-19.
  36. ↑ IDFC First Bank rallies 2% after Warburg Pincus seeks CCI nod to buy 10%, Kunjumon, Oliviya. Financialexpress(2025-05-02). Retrieved 2025-05-19.
  37. ↑ Shareholders reject board seat to Warburg-backed investor in IDFC FIRST Bank. Moneycontrol(19 May 2025). Retrieved 19 May 2025.
  38. ↑ IDFC First Bank gets board approval to raise Rs 4,000 cr. Business Standard India(2022-11-05). Retrieved 2022-12-12.
  39. ↑ IDFC First Bank at over 6-yr high; zooms 47% in 2 months on stable outlook, Korgaonkar, Deepak. www.business-standard.com(2023-06-15). Retrieved 2023-06-21.
  40. ↑ Want to stay on the pitch for long, not hit sixes and fours: IDFC First Bank MD, Kayastha, Anshika. BusinessLine(2023-08-08). Retrieved 2023-09-03.
  41. ↑ Home loans are our biggest driver and they'll keep growing: V Vaidyanathan, MD & CEO, IDFC First Bank. Financialexpress(7 May 2022). Retrieved 2022-12-12.
  42. ↑ IDFC First Bank revises savings account interest rate: Earn up to 6% interest rates on this amount. The Economic Times. Retrieved 2022-08-10.
  43. ↑ IDFC First Bank to give 7% interest on savings account opened through video KYC. Financialexpress(28 May 2020). Retrieved 2022-08-10.
  44. ↑ Interest rate on Savings account up to 6% p.a. | IDFC FIRST Bank. www.idfcfirstbank.com. Retrieved 2022-08-10.
  45. ↑ IDFC Bank takes the lead, launches Aadhaar Pay. The Hindu Business Line(2017-03-07). Retrieved 2017-03-09.
  46. ↑ IDFC Bank launches aadhaar-linked cashless merchant solution – The Economic Times. The Economic Times. Retrieved 2017-01-17.
  47. ↑ IDFC First Bank joins ONDC, Livemint. mint(2022-09-07). Retrieved 2023-07-13.
  48. ↑ IDFC First Bank joins ONDC — what does it mean for you?. cnbctv18.com(2022-09-07). Retrieved 2023-07-13.
  49. ↑ RBI CBDC: Digital Rupee pilot starts from November 1; SBI, HDFC, 7 other banks to participate in wholesale launch. The Economic Times(2022-11-09). Retrieved 2023-07-13.
  50. ↑ IDFC FIRST Bank launches foreign currency savings account for NRIs in GIFT City - CNBC TV18. CNBCTV18(2025-12-18). Retrieved 2026-03-07.
  51. ↑ Legal and Regulatory Insights on the IDFC First Bank -IDFC Limited Merger. SSRN Electronic Journal({Template:Date).
  52. ↑ IDFC FIRST Bank introduces Unique IDFC FIRST Global Savings for NRIs in GIFT City. The Tribune. Retrieved 2026-03-07.
  53. ↑ CRISIL Rating Rationale IDFC FIRST Bank Limited. CRISIL(9 October 2023). Retrieved 2024-11-30.
  54. ↑ BT500: 'Tragic to see rural India is most under-financed,' says IDFC First Bank MD & CEO V Vaidyanathan, Sharma, Saurabh. Business Today(2023-12-13). Retrieved 2024-11-30.
  55. ↑ IDFC Bank buys Grama Vidiyal Micro. BusinessLine(2016-07-25). Retrieved 2024-03-31.
  56. ↑ IDFC Bank acquires Grama Microfinance. The Indian Express(2016-07-13). Retrieved 2024-03-31.
  57. ↑ IDFC Bank to be renamed as IDFC First Bank after merging with Capital First. Business Standard(25 October 2018). Retrieved 31 March 2024.
  58. ↑ IDFC FIRST Bank Achieves Lowest-Ever Gross NPA of 1.88% in FY24, says V Vaidyanathan. Outlook Business(2024-09-02). Retrieved 2024-10-29.
  59. ↑ IDFC First Bank shares nosedive 10%, hit 52-week low as Q2 profit plummets 73%. The Economic Times(2024-10-28). Retrieved 2024-10-29.
  60. ↑ How Does IDFC First Stack Up Among India's Top 10 Most Valued Banks, Sultana, Nasrin. Forbes India. Retrieved 2023-09-14.
  61. ↑ IDFC First joins elite club of 10 most valuable listed banks in India, Sonavane, Ravindra. Moneycontrol. Retrieved 2023-09-14.
  62. ↑ BCCI awards title sponsorship rights to IDFC First for Rs 235 crore. The Economic Times(2023-08-25). Retrieved 2023-09-03.
  63. ↑ IDFC FIRST Bank secures title rights for Team India's home internationals for Rs 4.2 crore per match. cnbctv18.com(2023-08-25). Retrieved 2023-09-03.
  64. ↑ IDFC FIRST Bank launches Customer COVID relief Ghar Ghar Ration Program. Financialexpress(11 June 2021). Retrieved 2022-12-12.
  65. ↑ IDFC First Bank Employees to Fund Covid Relief for Customers. Outlook Money(12 June 2021). Retrieved 2022-12-12.
  66. ↑ Staff collusion led to Haryana Government account fraud: IDFC Bank. The Hindu(23 February 2026).
  67. ↑ What is the IDFC First Bank Rs 590 crore fraud case? Explained in 10 points. The Times of India(23 February 2026).

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