AU Small Finance Bank Clarifies Media Reports on Haryana Government De-Empanelment
AU Small Finance Bank has clarified media reports regarding its de-empanelment by Haryana government, revealing that a government account received ₹47 crores from a private bank (which disclosed fraudulent activities) and transferred the same amount through 14 authorized transactions. The bank's Haryana government deposits reduced from ₹735 crores to ₹538 crores post de-empanelment, representing 0.4% of total deposits. The bank maintains no indication of fraudulent activity on its part and continues cooperating with authorities while seeking re-empanelment.
*this image is generated using AI for illustrative purposes only.
AU Small Finance Bank has issued a detailed clarification addressing media reports and investor queries regarding its de-empanelment by the Haryana government for government business. The clarification comes amid reports linking the bank to suspected fraudulent activities involving another private sector bank.
Timeline of Events
The sequence of events began on February 16, 2026, when the bank received communication from a Haryana government department requesting account opening and transaction details for a specific government account. The bank promptly submitted all requested information.
| Date | Event |
|---|---|
| February 16, 2026 | Received communication seeking government account details |
| February 18, 2026 | Received inquiry about suspected unauthorized transactions |
| February 18, 2026 | Finance Department communicated de-empanelment decision |
| January 15, 2026 | Government account closed as per department instructions |
Transaction Details and Findings
Following these communications, AU Small Finance Bank initiated an internal review of the matter. The bank's preliminary findings reveal specific transaction patterns in the government account:
| Transaction Details | Amount |
|---|---|
| Initial credit from large private bank | ₹25 crores |
| Additional credits from another private bank | ₹47 crores |
| Transfers to customer account | ₹47 crores (14 transactions) |
| Final balance transferred back | ₹25 crores plus interest |
The bank emphasized that all 14 transactions totaling ₹47 crores were initiated by the concerned government department with proper authorization and executed according to standard procedures. The additional ₹47 crores came from another private sector bank that recently disclosed unauthorized and suspected fraudulent activities.
Impact on Deposits and Operations
The de-empanelment has resulted in a measurable impact on the bank's government deposits from Haryana. As of February 17, 2026, the bank held approximately ₹735 crores in deposits from the Haryana government. Following the de-empanelment announcement, this amount decreased to approximately ₹538 crores as of February 21, 2026.
| Deposit Metrics | Details |
|---|---|
| Deposits before de-empanelment | ₹735 crores |
| Deposits after de-empanelment | ₹538 crores |
| Number of accounts | ~200 accounts |
| Percentage of total deposits | ~0.4% |
Bank's Response and Governance Measures
AU Small Finance Bank maintains that based on available facts and preliminary review, there is no indication of financial impact or fraudulent activity toward the bank. The institution has informed its board of directors and continues its internal review process.
As part of ensuring a fair and transparent review, the bank has placed certain employees off-duty. The bank is actively engaging with the Haryana government to assess the reasons for de-empanelment and explore possibilities for re-empanelment.
Current Status and Outlook
The bank reiterates its commitment to strong governance, transparency, and safeguarding of public funds. It continues to maintain complete audit trails and documentation, including account opening forms, KYC documentation, transaction instructions, and verification records, all of which have been submitted to the concerned government department.
AU Small Finance Bank operates over 2,726 banking touchpoints across 21 states and 4 union territories, serving more than 1.25 crore customers. As of December 31, 2025, the bank reported shareholders' funds of ₹19,085 crores, a deposit base of ₹1,38,415 crores, and a total loan portfolio of ₹1,29,898 crores.
Historical Stock Returns for AU Small Finance Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.24% | +2.90% | +0.85% | +35.75% | +95.88% | +85.69% |
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