Financial accountability took center stage as Haryana’s administration swiftly de-empaneled IDFC First Bank and AU Small Finance Bank over suspected irregularities totaling nearly Rs 590 crore. This ban prohibits the banks from handling any government funds in the state pending further directives.
Detailed in an official circular, the order compels all state entities—including departments, boards, corporations, and PSUs—to freeze interactions with the banks. Priority actions include transferring residual balances to approved institutions and terminating accounts.
Finance officials pinpointed non-compliance with FD directives as the core issue. Investments intended for higher-yield flexi or fixed deposits were rerouted to savings accounts, eroding potential returns and causing undue losses.
Enhanced vigilance is now protocol: adhere rigidly to sanction terms, verify bank adherence periodically, execute monthly reconciliations, and escalate anomalies instantly. A statewide account reconciliation deadline is set for March 31, 2026, with reports due April 4.
The episode gained traction via IDFC First Bank’s disclosure of fraud in Chandigarh branch-managed Haryana accounts. Evidence suggests staff misconduct, potentially colluding with outsiders.
Discovery timeline: Disparities emerged during a department’s fund transfer request upon account closure. Parallel inconsistencies surfaced in additional accounts from February 18 onward.
Per the bank, the irregularity is ring-fenced to select government accounts, leaving others untouched. Pending reconciliation amounts to Rs 590 crore; final figures await thorough scrutiny and reclamation efforts.
In response, four personnel face suspension. The institution pledges comprehensive punitive actions—disciplinary, civil, criminal—against offenders. Lien notices are out to holding banks, auditors informed, and a third-party forensic audit underway.