No government funds will be parked, deposited, invested or traded through these institutions, the report said.
“IDFC First Bank and AU Small Finance Bank are hereby dismantled with immediate effect from government business in Haryana until further notice,” said a circular issued by the finance ministry.
IDFC First Bank on Sunday disclosed a fraud worth ₹590 crore committed by its employees and others on accounts held by the Haryana government with the private sector lender.
In a regulatory filing filed in the early hours, IDFC First Bank said it has disclosed the matter to the banking regulator and also filed a police complaint.
Meanwhile, as per the Haryana government circular, no government funds will be allowed to be parked, deposited, invested or traded through these banks henceforth.
All concerned departments/organizations will take immediate action for transfer of balance and closure of accounts in these banks as per the circular dated February 18.
It further said that the Finance Department has come to the notice that certain banks are not adhering to the conditions under which fixed deposits are made by the ministries and companies.
In several cases, it has been observed that despite clear instructions to place money in flexible deposits or other fixed deposits offering higher interest rates, banks continue to keep the money in savings accounts, resulting in lower returns and consequent financial losses to the government, the notice said.
The circular, issued under revised guidelines/instructions for dealing with banks, is addressed to, among others, all administrative secretaries, heads of departments and all deputy commissioners in Haryana, public, private and small finance banks operating in the state.
Many ministries and companies do not regularly reconcile their fixed deposits and bank accounts with the concerned banks, resulting in such irregularities not being detected on time.
In view of this, all departments, companies, boards and PSUs have been directed to: Ensure that fixed deposits are placed strictly in accordance with the approved terms and conditions.
Regularly check and confirm that banks are complying with the prescribed deposit instructions. Perform monthly reconciliation of all fixed deposits and associated bank accounts, stating the directions.
“Resolve any discrepancies immediately with the concerned banks and report any serious discrepancies to the Finance Department. It is further directed that all departments, boards and companies shall reconcile their respective bank accounts strictly in accordance with the guidelines of the Finance Department and complete the process in all respects before March 31, 2026,” the circular reads, while a compliance report, duly certified by the competent authority, will be submitted to the Finance Department by April 4.
Published on February 23, 2026
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