AU Small Finance Bank Stock Plunges 6% Following Haryana Government Ban on Government Business Ties

AU Small Finance Bank Plummets 6% Amid Fraud Allegations

On February 23, shares of AU Small Finance Bank dropped by over 6% after the Haryana Government removed the bank from its list of empanelled lenders due to serious allegations of fraudulent activities.

In response to the allegations, AU Small Finance Bank initiated an internal review of two specific accounts, stating that they were opened after completing all necessary KYC checks and requisite authorizations, fully complying with the bank's internal policies and processes.

IDFC First Bank also faced similar repercussions, with the Haryana Government de-empanelling the bank due to fraudulent activities tied to several employees at its Chandigarh branch, involving a staggering ₹590 crore linked to government accounts. The bank has suspended four implicated officials and is actively cooperating with investigations.

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The Haryana Government de-empanelled IDFC First Bank after receiving a request for account opening and transaction records for a particular account that the department had opened. The bank submitted all necessary account-related information, but the department requested additional details about alleged unauthorized transactions between the government account and another bank customer account. The bank was subsequently notified that it had been de-empanelled for government business in the state of Haryana.

Key Share Price Information

• AU Small Finance Bank share price opened at ₹990 apiece on the BSE
• Intraday high: ₹998
• Intraday low: ₹950.50 apiece on the BSE

According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, the stock witnessed a sharp sell-off in today's session, declining over 6% after failing to cross the key hurdle near ₹1040. The next crucial support is placed around ₹940, coinciding with the 89-EMA and the previous swing low.

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Ruchit Jain, VP - Head of Equity Technical Research, Motilal Oswal Financial Services, stated that the stock has witnessed selling pressure and has breached its 50 DEMA support today. The immediate support is now placed around ₹944 while ₹1040 will be seen as a hurdle.