Core Viewpoint - AU Small Finance Bank (AU SFB) is actively engaging with the Government of Haryana to understand the reasons behind its de-empanelment from conducting government business and is working towards re-empanelment, following a significant drop in its share price by up to 7% during trading hours [1]. Group 1: De-empanelment Details - On February 18, 2026, the Haryana government de-empanelled both IDFC First Bank and AU SFB from government business, prohibiting any government funds from being deposited or transacted through these banks [2]. - The finance ministry of Haryana noted that certain banks, including AU SFB, were not following instructions to place funds in higher interest-bearing deposits, leading to lower returns [3]. Group 2: Internal Review and Communications - AU SFB received a communication on February 16, 2026, from a Haryana government department requesting account opening and transaction details for a specific account, to which the bank complied [4]. - A subsequent communication on February 18, 2026, sought information regarding suspected unauthorized transactions between a government account and another customer account, prompting AU SFB to initiate an internal review [5]. Group 3: Financial Transactions and Audit - The government account in question was initially credited with ₹25 crore from a large private sector bank, with an additional ₹47 crore received from IDFC First Bank through multiple transactions [6]. - Out of the total credits, ₹47 crore were transferred to a customer account through 14 transactions, all of which were authorized and executed as per the department's instructions [6]. - AU SFB maintains a complete audit trail of all transactions and has submitted all relevant documentation to the government department, indicating no current signs of financial impact or fraudulent activity [7]. Group 4: Impact on Deposits - As of February 17, 2026, AU SFB had total deposits of ₹735 crore from the Government of Haryana, which decreased to ₹538 crore by February 21, 2026, representing 0.4% of the bank's overall deposits as of December 31, 2026 [8].