Bank Shares Fall Despite Market Rally: AU Small Finance and IDFC First Hit by De-Empanelment

Market Opens Strong, But AU Bank Shares Plunge: The Indian stock markets opened on a positive note on Monday, 23 February 2026. The BSE Sensex started at 82,906.83, higher than the previous close of 83,462.77, and quickly rose to 83,461.31 within 15 minutes—up 658.89 points from the last session.

Despite the broader market rally, shares of AU Small Finance Bank (AU SFB) dropped sharply in early trading, falling more than 7% by 9:30 AM.

Reason Behind the Decline
The fall came after AU Small Finance Bank disclosed yesterday that the Haryana government de-empanelled the bank from handling government-related work. The decision followed the discovery of some unauthorised and suspicious transactions in the bank’s accounts.

Late Sunday night, AU Bank issued a clarification stating that two accounts were under review. The bank emphasized that both accounts had been opened following all necessary KYC procedures and internal policies.

IDFC First Bank Also De-Empanelled
The Haryana government also de-empanelled IDFC First Bank due to a fraud case involving ₹590 crore, in which some employees of its Chandigarh branch were implicated. IDFC First Bank confirmed that four employees were suspended pending investigation.

Sequence of Events
AU Bank received a notice on 16 February 2026 from a Haryana government department requesting information on a specific account. The bank complied and provided the required details. On 18 February 2026, the department issued another notice concerning suspicious unauthorised transactions between the government account and another customer account. On the same day, the bank was de-empanelled for government work in Haryana.

Share Performance
AU SFB has been the best-performing stock in Nifty Bank over the past year, delivering over 90% returns and outperforming peers and the index. According to Trendlyne, the stock trades above its 50-day and 200-day simple moving averages (SMAs) of ₹992 and ₹838, respectively. On Monday at 9:36 AM, AU Bank shares were trading at ₹856.80, down ₹72 or 7.15% from the previous close.

IDFC First Bank Shares Drop Sharply
IDFC First Bank shares also fell sharply, down nearly 15% in early trading. The stock was trading at ₹71.03, down ₹12.53 from the previous close of ₹83.56.

Disclaimer: The analysis, opinions, and suggestions mentioned are those of the respective experts and do not reflect the views of Navbharat Times.