New Delhi: The Haryana Government on Sunday de-empanelled IDFC First Bank and AU Small Finance Bank from handling government business with immediate effect after an alleged fraud of around Rs 590 crore came to light. 

In an official circular, the state government said both banks have been barred from carrying out any government-related transactions in Haryana until further orders.

It directed all departments, boards, corporations and public sector undertakings to stop using these banks for deposits, investments or any other financial dealings.

Authorities have also been asked to immediately transfer existing balances and close accounts maintained with the two lenders.

The Finance Department pointed out lapses in following fixed deposit instructions. It noted that in some cases, funds that were supposed to be placed in flexible deposits or higher-interest fixed deposit schemes were allegedly kept in savings accounts, leading to lower returns and financial loss to the state.

Departments have been instructed to strictly follow approved deposit terms, regularly verify compliance by banks, conduct monthly reconciliations and report any discrepancies.

All reconciliations must be completed by March 31, 2026, and a certified compliance report has to be submitted by April 4, 2026.

The action comes after IDFC First Bank disclosed in a regulatory filing that it had detected a fraud of about Rs 590 crore involving certain Haryana government-linked accounts operated through its Chandigarh branch.

The bank said there were prima facie unauthorised and fraudulent activities carried out by some employees at the branch, possibly involving other individuals or entities.

According to the bank, the issue surfaced when a Haryana government department requested closure and transfer of its account balance to another bank.

During the process, discrepancies were found between the amount mentioned and the actual balance in the account.

Similar discrepancies were later identified in other government-linked accounts from February 18 onwards.

IDFC First Bank clarified that its preliminary internal review suggests the matter is limited to a specific group of Haryana government-linked accounts handled by the Chandigarh branch and does not affect other customers.

The total amount under reconciliation across the identified accounts is estimated at around Rs 590 crore, and the final figure will be determined after further validation and possible recoveries.

Four bank officials have been suspended pending investigation. The bank said it will take strict disciplinary, civil and criminal action against those found responsible.

It has also issued recall requests to certain beneficiary banks to lien-mark balances in suspicious accounts as part of recovery efforts. The statutory auditors have been informed and an independent external agency will carry out a forensic audit.

Major US airlines have expressed concern over travel disruptions after the Department of Homeland Security (DHS) decided to temporarily suspend its PreCheck and Global Entry programmes amid an ongoing government shutdown.The suspension will take effect from 6 a.m. ET (1100 GMT) on Sunday, days after a partial shutdown began following the failure of Republicans and Democrats to reach an agreement on immigration enforcement reforms, news agency Reuters reported.Airlines said travellers received very little advance warning about the move, leaving many with limited time to adjust their travel plans. “Airlines for America is deeply concerned that … the traveling public will be, once again, used as a political football amid another government shutdown,” Chief Executive Chris Sununu said, urging Congress to “get a deal done.”Sununu added that a similar shutdown last fall caused losses of $6.1 billion across the travel industry and related sectors.Homeland Security Secretary Kristi Noem said airport and border agencies would prioritise general passenger movement while suspending “courtesy and special privilege escorts.”“We are making tough but necessary workforce and resource decisions to mitigate the damage,” she said in a DHS statement.The suspension forms part of emergency steps taken by DHS to redirect staffing resources after Congress failed to approve additional funding, according to a Washington Post report.The Transportation Security Administration (TSA) said the PreCheck programme had more than 20 million active members in 2024, while total vetted travellers across DHS programmes, including Global Entry, exceeded 40 million.PreCheck allows approved passengers to use dedicated fast-track security lanes at US airports, while Global Entry expedites customs and immigration clearance for pre-approved, low-risk international travellers entering the United States.The move follows orders from the Trump administration last week directing the Federal Emergency Management Agency to suspend deployment of aid workers to disaster-affected areas during the shutdown.