The AU Small Finance Bank which was de-empaneled by Haryana government on February 18 after suspected fraudulent transactions were detected in IDFC First Bank accounts said on Monday that following a preliminary review, it has come to light that there was no indication of any financial impact or any fraudulent activity towards them.
The bank in a statement said it has though initiated an internal review. The statement said that as per their records, the Haryana government account was opened with an initial credit of ₹25 crore transferred from a large private sector bank. It further said additional credits of ₹47 crore were subsequently received through multiple transactions from IDFC First bank.
“Out of the total credits received in the government account, ₹47 crore was transferred to the customer account through 14 transactions.
As per bank’s preliminary findings, all these 14 transactions were initiated by the concerned government department, duly authorised, and executed in accordance with the instructions provided by the department, in the normal course of business.
The statement said that the government account was closed on January 15, 2026, as per instructions from the department and the outstanding balance of ₹25 crore along with accrued interest was transferred back to the original large private sector bank. Based on available facts at this stage and preliminary review, there is no indication of any financial impact or any fraudulent activity towards the bank. As on February 17, 2026, the bank had total deposits of ₹735 crore from the Haryana government which has reduced to ₹538 crore as on February 21, 2026, across 200 accounts post this de-empanelment.
The bank received a communication dated February 16, 2026, from a particular Haryana government department seeking account opening and transaction details relating to one specific account opened by the said department. All requested account-related details were submitted. On February 18, the bank also received a separate communication from the department seeking information regarding suspected unauthorised transactions between the government account and another customer account maintained with the bank. The bank confirms that both these accounts were duly opened after completion of all applicable KYC checks and requisite authorisations and in accordance with the bank’s internal policies and processes,” the statement said.
{{/usCountry}}The bank received a communication dated February 16, 2026, from a particular Haryana government department seeking account opening and transaction details relating to one specific account opened by the said department. All requested account-related details were submitted. On February 18, the bank also received a separate communication from the department seeking information regarding suspected unauthorised transactions between the government account and another customer account maintained with the bank. The bank confirms that both these accounts were duly opened after completion of all applicable KYC checks and requisite authorisations and in accordance with the bank’s internal policies and processes,” the statement said.
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