NEW DELHI: The Reserve Bank of India on Monday said it is closely monitoring developments related to IDFC First Bank and AU Small Finance Bank but emphasised that there is no systemic issue arising from the situation.
Responding to a query at the post-Central Board meeting press conference, RBI Governor Sanjay Malhotra reiterated the central bank’s long-standing policy of not commenting on individual banks or regulated entities.
“As a policy, we do not comment on any individual bank or regulated entity. We are watching the developments. There is no systemic kind of issue over here,” the Governor said.
Haryana government has de-paneled IDFC First Bank and AU Small Finance Bank following the former admitting that it found Rs 590-crore fraud by its employees while the latter also disclosed Rs 47 crore of fraudulent transactions in a government account.
The de-empanelment has a sizable impact on the AU Small Finance Bank government’s deposits. As of February 17, 2026, the bank held around Rs 735 crore in deposits from the Haryana government departments. Following the de-empanelment, this amount decreased to around Rs 538 crore as of February 21, 2026.
AU Bank also said it has initiated an internal review after the government had sought clarification regarding some suspicious transactions relating to one specific account by the finance department and a customer account.
"Prima facie, unauthorised and fraudulent activities have been carried out by certain employees at a particular branch in Chandigarh in a specific set of Haryana government accounts and potentially involving other individuals/entities/counterparties," said the IDFC First Bank in a regulatory filing.
Admitting to the reason for the de-empanelment, Au Bank said Monday that on February 16, it received a communication from a Haryana government department seeking account-opening and transaction details relating to one specific account opened by the department, and it submitted all related details