- The Reserve Bank of India (RBI) gave the green light on August 7 for AU Small Finance Bank to move from being a Small Finance Bank to a Universal Bank, granting ‘in-principle’ approval.
- Fast forward to September 3, 2024, and AU Small Finance Bank has officially submitted its application to the RBI for this voluntary transition.
- This move is a big deal for the bank, as it could broaden its services and reach, as noted in an exchange filing on the same day.
- Back in July, AU Small Finance Bank shared with Moneycontrol that they were planning to apply for the universal banking license within about four weeks.
- “We’ve got the board’s approval, and it was something everyone anticipated.
The Reserve Bank of India (RBI) gave the green light on August 7 for AU Small Finance Bank to move from being a Small Finance Bank to a Universal Bank, granting ‘in-principle’ approval.
Fast forward to September 3, 2024, and AU Small Finance Bank has officially submitted its application to the RBI for this voluntary transition.
This move is a big deal for the bank, as it could broaden its services and reach, as noted in an exchange filing on the same day.
Back in July, AU Small Finance Bank shared with Moneycontrol that they were planning to apply for the universal banking license within about four weeks. “We’ve got the board’s approval, and it was something everyone anticipated. So, we’re set to apply in the next four weeks or by the end of August,” said Sanjay Agarwal, the bank’s MD and CEO. The board had given the thumbs up to this proposal on July 25, 2024.
To qualify for the transition from a small finance bank to a universal bank, certain criteria must be met: the bank needs to have a solid performance record for at least five years, be listed on stock exchanges, and maintain a minimum net worth of Rs 1,000 crore.
Additionally, the bank must have a Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NNPA) ratio of 3 percent or less and 1 percent or less, respectively, over the last two financial years.