Haryana Govt urges to focus on Public Sector Banks as govt de-empanels IDFC First Bank, AU Small Finance Bank

New Delhi, Feb 23, 2026: Two Private sector Banks, IDFC First Bank and AU Small Finance Bank are de-empanelled by the state government of Haryana after some illegal and fraudulent activities were notified by the banking organizations. The organizations have been removed from the panel of approved banks in any case of undertaking government business activity.

Both the private lenders are witnessing tumbled shares amid the on-going tussle situation arising in the respective sectors.

The Haryana government has directed all the government bodies and departments including corporations, boards and other entities to opt for public sector banks in terms of any banking relationship or authorization and any department which seeks to open or operate an account with a private sector will need to get prior approval from the Finance Department of the state government along with the clarification of detailed justification.

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The government has issued an official clarification regarding the perspective of banking organizations that are not following the prescribed conditions for the banking services.

The state government of Haryana has issued a notification to AU Small Finance Bank regarding the suspected unauthorized bank accounts and transactions details for the fraudulent activity reported.

Further, the IDFC First Bank has reported an incident involving unauthorized and fraudulent activities by certain employees at a particular branch in Chandigarh. The aggregate amount under the reconciliation across the identified accounts at the respective branch is around Rs 590 crore.