The Reserve Bank of India (RBI) on August 7 granted 'in-principle’ approval to AU Small Finance Bank for transitioning from a Small Finance Bank to a Universal Bank.
On September 3, 2024, AU Small Finance Bank has applied to the RBI for voluntary transition from a Small Finance Bank to a Universal Bank.
This is a significant step for the bank, potentially expanding its reach and services, lender had said in an exchange filing on September 3, 2024.
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, 2024.
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.
Further, the eligibility criteria for an SFB to transition is having GNPA and NNPA of less than or equal to 3 percent and 1 percent respectively in the last two financial years.
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