IDFC First Bank and AU SFB de-empanelled for Hry govt biz

Chandigarh: The Haryana government has de-empanelled IDFC First Bank and AU Small Finance Bank (SFB) for government business with immediate effect, according to a Finance Department circular.

No government funds will be parked, deposited, invested or transacted through these banks until further orders.

Departments have been directed to transfer balances and close accounts held with the two lenders.

The move follows IDFC First Bank’s disclosure of a Rs 590-crore fraud allegedly committed by its employees and others in accounts linked to the Haryana government. The bank said it has informed the banking regulator and lodged a police complaint.

The circular also flagged broader concerns over banks not adhering to fixed deposit conditions.

In several instances, funds meant for higher-yield fixed or flexible deposits were allegedly kept in savings accounts, leading to lower returns and financial loss to the state.

All departments, boards, corporations and Public Sector Undertakings (PSUs) have been instructed to strictly follow approved deposit terms, verify compliance by banks and reconcile fixed deposit and related accounts on a monthly basis.

The reconciliation process must be completed by March 31, 2026, with a compliance report submitted to the Finance Department by April 4.