AU Small Finance Bank has alleged that the Haryana State Vigilance and Anti-Corruption Bureau (SV&ACB) “kept” its Managing Director Sanjay Agarwal for a full day on March 26, abused the “investigative process,” and the state police locked its branches across the state on March 30 to “extract” the amount it was allegedly defrauded of in a multi-crore scam.The bank has further said that “threats” were communicated through “political and administrative channels including senior officers in the Department of Power and the Office of Chief Secretary” to “escalate criminal action and adverse publicity” against it, its directors and its officers, unless they paid Rs 25 crore.The AU Small Finance Bank levelled these allegations in a civil writ petition filed before the Punjab and Haryana High Court. During a hearing on May 29, the Bench of Justice Suvir Sehgal and Justice Vikas Puri issued a notice to the Haryana.Officials of IDFC First Bank and AU Small Finance Bank, along with Haryana Government officers, are allegedly involved in the Rs 645-crore bank scam.Earlier, Kotak Mahindra Bank, which is at the centre of a similar scam worth Rs 150 crore, had alleged before the Bombay High Court that the Haryana Police authorities sealed 109 of its branches in Haryana on March 30, and these were de-sealed only after depositing Rs 127.27 crore in the savings bank account of the Municipal Corporation, Panchkula.The Bombay High Court had on April 6 granted interim relief to Kotak Mahindra Bank, which had sought a freeze on the amount it had deposited in the MC’s account.On December 29, 2025, AU Small Finance Bank honoured a cheque for Rs 25 crore drawn on Haryana Power Generation Corporation Limited (HPGCL) Employees’ Pension Fund Trust payable to M/s Swastik Desh Projects, a shell entity floated by the accused to siphon off government funds.According to the bank, the cheque was honoured strictly in accordance with the banking protocols. It added that an independent forensic examination report, dated March 7, issued by Truth Labs, confirmed that the signatures on the cheque were genuine and corresponded with the specimen signatures of the authorised signatories of the HPGCL Trust.The bank claimed the proceeds of the cheque were misappropriated by a criminal conspiracy operating entirely “outside the knowledge and authorisation of the senior management of the bank”.It told the HC that it assisted in the arrest of its former officials on February 24 and March 6.On February 27, the bank had committed to the state government that it would return the amount to the HPGCL on March 16 if the reconciliation gap of Rs 25 crore persisted. However, after the Truth Labs report, the Board of Directors’ consideration of the matter and legal advice led to the withdrawal of the conciliatory representation, dated February 27.The bank conveyed to the state government that “reversing or reimbursing the said amount without lawful basis would not be consistent with the governing banking law and the regulatory framework applicable to scheduled commercial banks”. It claimed that it forwarded the communication to the Principal Secretary to the CM and ACS, Finance, Arun Gupta, as well as to the SV&ACB.However, the money was “extracted” 11 days later, the bank claimed.On March 26, the bank said its MD and Chief Executive Officer Sanjay Agarwal was kept at the SV&ACB office for the entire day on the basis of a summons. It claimed that the summons was issued “not to advance any investigation but to procure the impugned payment, which was, in substance, an abuse of the investigative process”.On March 30, the bank claimed that its branches across Haryana “were blocked by the Haryana Police as part of the same coordinated exercise by which all 109 branches of Kotak Mahindra Bank Limited” were “locked and barricaded” without warrant, summons or order of any court of competent jurisdiction.When AU Small Finance Bank escalated the matter to senior officials of the Haryana Government, they assured that the sum would be refunded once the government secured corresponding recoveries from the accused.The bank claimed that, left with no choice, it deposited Rs 25.33 crore into HPGCL’s account under coercion.The bank has prayed before the High Court to declare the “extraction” of Rs 25.33 crore from it as illegal, refund the amount and restrain the state government from taking any further coercive action.