IDFC First Bank's MD and CEO V Vaidyanathan has clarified that he had sold shares of his bank to repay a loan he had taken to exercise the stock options he was eligible for under the employee stock option plan.

Vaidyanathan sold 2.75 crore shares for Rs 58 crore on March 19. The timing of the sale raised eyebrows, given speculation in then market over the financial health of private sector banks in general.

Sale of shares by promoters and top management is usually taken as a sign by the market that the share price may be overvalued. In a bearish environment, such sales are viewed even more suspiciously.

Vaidyanathan said he had exercised a "big tranche" of options a month back at Rs 40 per share.

IDFC shares today are quoting around Rs 20.

"I had excised a lot (of options) even earlier. It just so happens that during the coronavirus crisis, stock prices have crashed across all banks," he told CNBC-TV18.

"So the margin fell. (meaning, there was a margin call) So I thought it is best to completely sell the stock and square up the loan,” he said.

Vaidyanathan said he intended to sell between Rs 30 crore and Rs 35 crore worth of shares today and with that he would repay his entire loan for the ESOP

"I will have no need to sell any more shares and the only loan I will have is the home loan,” he added.

Vaidyanathan said he had about 17.5 crore shares and options in the bank.

"Of that, close to about 4 crore have come for sale in this process including what is coming today and I will still have close to 13.5 crore shares and options in the bank," he said.

"As a percentage of the equity of the bank that translates to 2.8 percent. It is substantial. I am deeply committed to making a wonderful bank. We are a wonderful bank, the trajectory is fantastic. It is one of those moments when there was a ESOP loan, there is a stock. At some stage, there is a margin call, I had to sell it and square the loan, I still have a lot to work for,” he said.