Canara Bank’s housing finance company, Can Fin Homes, saw its share price fall as much as 9.5% in Wednesday’s trading session after it reported that employees at one of its branches committed a fraud of nearly Rs 38.5 crore.

At 12:35 pm, the stock was trading at Rs 771.90, a dip of 9.32% from the previous closing price on the National Stock Exchange (NSE). The stock fell for the second straight session, losing nearly 15% in two days.

In an exchange filing, the housing financier said three employees at its Amabala branch, namely Vishal Saxena, Vivek Bhagat, and Deepak Gupta, had committed fraud by transferring funds to different personal bank accounts, misusing their cheque signing authority. 

The nature of fraud has been defined as the misappropriation of funds with an estimated fraud amount of Rs 38.53 crore. The company’s internal team detected the fraud on July 24 and subsequently filed a First Information Report (FIR)  with the jurisdictional police. 

The company estimates that the fraud will have a one-time impact on the company’s profitability but will not impact its assets or asset quality. The management said that they will make a 100% provision and do not expect any recovery this quarter. 

This is the second fraud incident the company has reported in recent months. The corporation discovered 37 loan accounts with fictitious tax returns in May 2022.