The Reserve Bank of India (RBI) has granted ‘in-principle’ approval to AU Small Finance Bank (AU SFB) for its transition from a Small Finance Bank to a Universal Bank, marking a major milestone in the lender’s growth journey.
The approval follows AU SFB’s application to the RBI on September 3, 2024, seeking a voluntary shift to universal banking. The bank had disclosed the development in an exchange filing, terming the move a “significant step” that will potentially expand its reach and range of services.
In July this year, AU SFB’s Managing Director and CEO, Sanjay Agarwal, had told Moneycontrol that the lender planned to apply for the universal banking licence within four weeks. “We have received approval from the board and it was widely expected. So, after this, we have decided to apply in the next four weeks or by August-end,” Agarwal had said. The board gave its formal nod to the proposal on July 25, 2024.
As per RBI’s guidelines, a Small Finance Bank seeking to transition into a Universal Bank must have:
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A satisfactory track record of performance for at least five years
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A listing on stock exchanges
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A minimum net worth of ₹1,000 crore
AU Small Finance Bank, headquartered in Jaipur, meets these eligibility norms, having consistently reported strong performance since its inception as an SFB in April 2017. The transition, once complete, will allow the bank to offer a wider suite of products and services, enhancing its competitive position in the Indian banking sector.