Chandigarh, February 22 The Haryana government has de-empaneled IDFC First Bank and AU Small Finance Bank for government business with immediate effect, according to an official circular.
No government funds will be parked, deposited, invested, or transacted through these institutions, it said.
"IDFC First Bank and AU Small Finance Bank are hereby de-empaneled for government business in Haryana with immediate effect, pending further orders," according to a circular issued by the Finance Department.
IDFC First Bank disclosed on Sunday that its employees and others had committed a fraud of Rs 590 crore involving accounts held by the Haryana government with the private sector lender.
In a regulatory filing made in the early hours, IDFC First Bank said it had informed the banking regulator and also filed a police complaint.
Meanwhile, according to the Haryana government circular, no government funds shall henceforth be parked, deposited, invested, or transacted through these banks.
All concerned departments/organizations shall take immediate action for the transfer of balances and closure of accounts maintained with these banks, as per the circular dated February 18.
It further stated that the Finance Department has come to notice that certain banks are not adhering to the conditions under which the Departments and Corporations are making fixed deposits.
In several cases, it has been observed that despite clear instructions to place funds in flexible deposits or other fixed deposit instruments offering higher interest rates, banks are retaining the funds in savings accounts, resulting in lower returns and consequent financial loss to the Government, as per the notification.
The circular, issued under revised guidelines/instructions for dealing with banks, is addressed to all the Administrative Secretaries, heads of departments and all Deputy Commissioners in Haryana, public, private and small finance banks operating in the state, among others.
Many Departments and Corporations are not regularly reconciling their fixed deposit and bank accounts with the concerned banks, leading to non-detection of such irregularities in a timely manner.
In view of this, all Departments, Corporations, Boards, and PSUs have been directed to: Ensure that fixed deposits are placed strictly in accordance with the approved terms and conditions.
Regularly verify and confirm that banks are complying with the prescribed deposit instructions. Undertake reconciliation of all fixed deposit and related bank accounts on a monthly basis, as stated in the directions.
"Immediately take up any discrepancies with the concerned banks and report serious deviations to the Finance Department. It is hereby further directed that all Departments, Boards, and Corporations shall reconcile their respective bank accounts strictly in accordance with the guidelines issued by the Finance Department and complete the process in all respects by March 31, 2026," reads the circular, while adding a compliance report, duly certified by the competent authority, shall be submitted to the Finance Department by April 4.
