The Reserve Bank has granted ‘in-principle’ approval to AU Small Finance Bank Ltd. (AUSFB) for transitioning from a small finance bank (SFB) to a universal bank.
This is the first time after 11 years that an entity has been granted a universal bank licence by the regulator. Last time, the universal banking licences were granted in 2014 to Bandhan Bank and IDFC Bank, which later became IDFC First Bank.
Sanjay Agarwal, a Chartered Accountant and a first-generation entrepreneur established Au Financiers established in 1996. Headquartered in Jaipur, Rajasthan, the retail-focused non-banking finance company bagged the SFB licence in 2015 and Au Financiers commenced its journey as an SFB on April 19, 2017.
In the same year, it got the scheduled bank status on November 1. In 2021, it became the largest SFB of the country.
Its footprint expanded from 403 touchpoints in 8 States and 2 Union Territories to 2,505 banking touchpoints across 21 States and 4 Union Territories as on 30 June 25, according to its website.
Guidelines for licensing of SFBs in private sector dated November 27, 2014 had provided a transition path for SFBs to convert into Universal Banks subject to the SFB’s fulfilling minimum paid-up capital/ net worth requirement as applicable to Universal Banks, satisfactory track record of performance as an SFB for a minimum period of five years and RBI’s due diligence exercise.
Further, with the objective of bringing better clarity, the eligibility criteria for an SFB to transition into a universal bank were detailed in a circular issued in April 2024.
Published – August 07, 2025 08:58 pm IST