In response to questions from investors and other outlets, AU Small Finance Bank Limited has provided a thorough explanation of its recent de-empanelment from government business in Haryana.
Under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements, 2015) Regulations, the National Stock Exchange of India Limited and the BSE Limited were notified of the clarification. In a statement dated February 16, 2026, the bank mentioned that it had received a request for information regarding the opening and transaction data of a certain government account from a department of the Haryana government. All necessary details were supplied.
The bank was once again notified by the department on February 18, 2026, of what appears to be suspicious activity involving the government account and a customer account that the bank kept. The same day, the bank was notified of its de-empanelment from government operations in Haryana by the Finance Department of the government of the state. Initial investigation by the bank indicates that all fourteen transactions were lawfully initiated and sanctioned by the relevant government agency. All documents given to the department, such as account opening forms, Know Your Customer paperwork, checks, transaction instructions, and verification call recordings, are kept by the bank as a full audit trail.
The directives from the relevant department led to the closure of the government account on January 15, 2026, and the remaining amount of ₹25 crore, including interest, was returned to the private sector bank from where it originated. According to the bank, there is currently no evidence of any financial impact or fraudulent behaviour by the bank, based on the facts and preliminary review.
We have notified the board of the problem, and we are currently conducting an internal review. Some staff have been put on administrative leave pending review in order to maintain transparency.
The bank has promised to fully cooperate with authorities and is in the process of interacting with the Haryana government to learn about the de-empanelment.
