AU Small Finance applies for 'voluntary transition' to a Universal Bank

The move from a SFB to being a universal bank will potentially expand AU Small's reach and services, the lender said.

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26 Aug, 2025 12:21

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AU Small Finance Bank has applied to the Reserve Bank of India (RBI) for voluntary transition from a Small Finance Bank to a Universal Bank, the lender said in an exchange filing on September 3.

This is a significant step for the bank, potentially expanding its reach and services, the release said.

"We wish to inform that the Bank has submitted an application to the Reserve Bank of India ("RBI") to seek approval for voluntary transition from a Small Finance Bank to Universal Bank today i.e. on September 03, 2024," AU Small Finance Bank said in the filing.

In July, AU Small Finance Bank had told Moneycontrol that the lender will apply for the universal banking licence in about a 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,” Sanjay Agarwal, MD and CEO of the bank had said. The board had given its go-ahead to the proposal on July 25.

The eligibility criteria for a small finance bank to transition into a universal bank is that it must have a satisfactory track record of performance for at least five years, should be listed on stock exchanges, and should have a minimum net worth of Rs 1,000 crore.

Shares of AU Small Finance are lower by close to 14 percent so far this year. On August 26, AU Small Finance Bank had seen a significant block trade of 1.3 crore shares, representing 1.7% of total equity, change hands. On June 20, private equity firm WestBridge Capital had divested a 1.75 percent stake in the lender for Rs 845 crore through an open market transaction.

Earlier this year, in June, AU Small had approved a fundraise of Rs 11,000 crore.