Fino Payments Bank receives complaints about misappropriation of funds; stock slips over 8%

At around 10:11 a.m., shares of Fino Payments Bank were down 1.5 per cent at Rs 325.35 apiece on the BSE, falling for the third straight session. The market capitalisation of the stock stood at Rs 2,698.22 crore.

Fino Payments Bank has appointed KPMG to conduct a detailed independent investigation of the incident, image- Pixabay

Shares of Fino Payments Bank, a commercial banking company, slipped as much as 8 per cent in the morning trade, touching the day's low of Rs 304.5 apiece on Thursday, September 21. The selling pressure in the scrip came after the bank said it had received complaints from one of its clients regarding misappropriation of funds, cheating, and forgery.

At around 10:11 a.m., shares of Fino Payments Bank were down 1.5 per cent at Rs 325.35 apiece on the BSE, falling for the third straight session. The market capitalisation of the stock stood at Rs 2,698.22 crore. The stock settled 1.6 per cent lower at Rs 325 apiece on BSE.

"Fino Payments Bank Limited has received complaints from one of its clients in Mumbai and some of its merchants, distributors, and other individuals in Gujarat and Maharashtra through email for non-receipt or repayment of funds pertaining to or invested in potential fictitious schemes allegedly floated by some of the employees of the bank in their personal capacity," the bank's regulatory filing read.

TRENDING NOW

Further, the bank has appointed KPMG to conduct a detailed independent investigation of the incident. The bank has also filed a police complaint. The investigation so far, prima facie, has indicated that there were unauthorised actions and misrepresentations by the alleged staff.

What do analysts suggest?

"Investors should avoid buying the stock as of now due to the negative news of misappropriation of funds. One can instead focus on other banking stocks that are doing well," said Vikas Sethi, Managing Director, Sethi Finmart Pvt Ltd.