AU Small Finance Bank clarifies de-empanelment from Haryana govt: ‘Internal review on, assessing reasons…’
AU Small Finance Bank clarified the Haryana government’s instructions to clear this situation and informed the stock exchanges that it has “initiated an internal investigation” into this matter.
This comes after AU Small Finance Bank and IDFC First Bank had their duties for Haryana government business removed on February 22 until further orders. This means both are banned and no government funds will be parked, deposited, deposited or transacted through these institutions, according to a notification from the state Finance Department.
Notably, IDFC First Bank said that four employees in Chandigarh were suspected to be involved in an incident on February 21. ₹590 crore scam targeting accounts linked to Haryana government.
AU Small Finance Bank issued a statement regarding the dismissal
According to the bank, on February 16, a communication was received from the Haryana government department seeking account opening and transaction details for a particular account (government account) opened by the said ministry; and we have sent all relevant details.
Later, on February 18, 2018, another communication was received from the ministry requesting information regarding suspected unauthorized transactions between the government account and another customer account at the bank.
Later the same day, the state’s Finance department informed the bank about the abolition of mandate for government jobs in Haryana.
What did AU Small Finance Bank’s internal review show?
The Bank launched an internal review into this matter, which confirmed that the relevant government and customer accounts were “duly opened following completion of all relevant KYC checks and necessary authorizations and in accordance with the Bank’s internal policies and processes.”
“Based on the facts available at this stage and the preliminary investigation, there is no financial impact on the Bank or any indication of fraudulent activity,” the statement said.
He added that all transactions in the government account in question were examined and the records showed the following:
What steps did AÜ Küçük Finans Bankası take?
- The Board has been informed and the bank is continuing its internal review of this matter. “To ensure a fair and transparent review, some employees were dismissed,” he added.
- It is also in touch with the Haryana government to assess the reasons for the dismissal and will “fully cooperate with the government and other authorities where necessary”.
As of February 17, AU Small Finance Bank’s total deposits are ~ ₹735 crore from Haryana government, reduced to ~ ₹538 crore in around 200 accounts as of February 21 (~0.4% of the bank’s total deposits as of December 31), post this decommissioning.
