The bank said the payout pertains to eligible microfinance loans sanctioned up to March 2025 and represents nearly 100% of the claim amount submitted under the scheme.
According to the filing, the bank had already created provisions against these microfinance defaults in earlier periods, and the amount received is expected to lead to a write-back of those provisions.
The lender added that nearly 97% of all new microfinance loan originations since January 2024 have been covered under the CGFMU scheme. The bank’s microfinance loans are primarily extended to women entrepreneurs under the Joint Liability Group structure.
Shares of IDFC First Bank rose nearly 3% and closed near the day’s high on the NSE ahead of the announcement.
The development follows the bank’s March quarter earnings reported in April, where it posted a 4.9% year-on-year rise in net profit to ₹319 crore, supported by strong growth in core income and improving asset quality.
Net interest income (NII) during Q4FY26 rose 15.7% year-on-year to ₹5,677 crore, while gross non-performing assets improved to 1.61% from 1.69% sequentially. Net NPA declined to 0.48% from 0.53%.
Provisions during the quarter dropped sharply to ₹869 crore from ₹1,398 crore in the previous quarter, reflecting easing stress levels. The bank had also utilised ₹35 crore of contingency provisions related to microfinance and carried forward ₹130 crore into the next financial year.
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Management had earlier said the bank fully expensed the financial impact of the Chandigarh incident during the quarter, with no further material adjustments expected.
