Shares of AU Small Finance Bank declined 3.56% to Rs 993.00 on Monday after the Government of Haryana de-empanelled the lender for government business following the recent disclosure of suspected unauthorised transactions linked to another private sector bank.
The development comes after a sequence of events that began on February 16, 2026, when the bank received a communication from a Haryana government department seeking account and transaction details. On February 18, the bank received an inquiry regarding suspected unauthorised transactions, and later the same day, the Finance Department communicated its decision to de-empanel the bank.
According to AU Small Finance Bank’s clarification, preliminary findings show that the government account received Rs 25 crore from a large private bank and Rs 47 crore from another private bank. Fourteen transactions totaling Rs 47 crore were transferred to a customer account, while Rs 25 crore plus interest was subsequently moved back. The bank stated that all 14 transactions were initiated by the concerned government department with proper authorisation.
The de-empanelment has impacted deposits from the Haryana government. Deposits fell from approximately Rs 735 crore on February 17 to Rs 538 crore by February 21. These deposits account for around 0.4% of the bank’s total deposit base.
The bank has informed its board, placed certain employees off-duty, and is conducting an internal review while engaging with the state government regarding re-empanelment. Haryana’s finance department has also issued broader instructions to state bodies to ensure stricter compliance, reconciliation of fixed deposits, and reporting of discrepancies by March 31, 2026.
As of December 31, 2025, AU Small Finance Bank reported shareholders’ funds of Rs 19,085 crore, deposits of Rs 1,38,415 crore, and a loan portfolio of Rs 1,29,898 crore.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.