Haryana Government De-Empanels AU Small Finance Bank and IDFC First Bank Over Suspected Fraud

The Haryana government has de-empanelled AU Small Finance Bank and IDFC First Bank from government business following suspected fraudulent and unauthorised transactions linked to Haryana government accounts. IDFC First Bank disclosed a Rs 590 crore fraud involving employees at its Chandigarh branch. AU Small Finance Bank denied wrongdoing, stating all accounts were opened with proper KYC and authorisations, and that preliminary reviews show no financial impact or fraud on its part. Both banks are cooperating with investigations, and AU Small Finance Bank has initiated an internal probe and placed some employees off duty. The de-empanelment led to a decline in AU Small Finance Bank's shares and a reduction in government deposits with the bank.