In a statement, the bank said that on 18 February 2026, it received a separate communication from the department seeking information regarding suspected unauthorised transactions between a government account and another customer account.

The bank said it maintains a complete audit trail of transactions and that all relevant details have been recorded.

It added that there is no indication of any financial impact on the bank or evidence of fraudulent activity involving the bank.

As of 21 February deposits from the Government of Haryana with AU Small Finance Bank stood at Rs 538 crore across nearly 200 accounts, accounting for about 0.4% of the bank's overall deposits as of 31 December 2026.

The bank said it continues to conduct an internal review of the matter. To ensure a fair and transparent process, certain employees have been placed off duty.

AU Small Finance Bank also said it is engaging with the Government of Haryana to understand the reason for the de-empanelment.

AU Small Finance Bank is engaged in providing a range of banking and financial services, including retail banking, wholesale banking, treasury operations, and other services.

The bank reported a 26.34% jump in standalone net profit to Rs 667.66 crore in Q3 FY26, compared with Rs 528.45 crore in Q3 FY25. Total income increased 15.20% year on year (YoY) to Rs 5,451.26 crore in Q3 FY26, as against Rs 4,731.89 crore in Q3 FY25.

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