Press Release - Clarification on Media Reports Relating to Haryana Government deempanelment instructions
AUBANK · price
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Awaiting price reaction for this filing.
AU Small Finance Bank has issued a detailed clarification after the Haryana Government de-empaneled it (along with another private sector bank) for government business, following that other bank's disclosure of suspected fraud. The bank says a Haryana Government account opened in 2025-26 received about ₹72 crore (₹25 crore initial + ~₹47 crore in additional credits), of which ~₹47 crore was moved in 14 transactions to a customer account — but all transactions were initiated and authorized by the Government Department itself. The bank states its KYC, audit trail, and processes were followed, and there is no indication of fraud or financial loss to it. Government deposits fell from ~₹735 crore (Feb 17) to ~₹538 crore (Feb 21), which is only about 0.4% of the bank's total deposits. The bank has placed certain employees off-duty, informed its Board, and is engaging with the Haryana Government for re-empanelment.
The financial hit looks small — Haryana government deposits are only ~0.4% of total deposits — but the stock may face short-term pressure due to reputational association with another bank's fraud case and uncertainty around re-empanelment. Investors should watch for updates on the internal review and any further deposit withdrawals from Haryana government accounts.