AU Small Finance Bank gets in-principle RBI nod to become a universal bank

AU Small Finance Bank has secured an in-principle approval from the Reserve Bank of India (RBI) to transition to a universal lender, according to a central bank statement.

Currently, Jaipur-headquartered AU SFB is a small finance bank. 

As per RBI rules, small finance banks are allowed to convert into universal banks subject to certain conditions. 

Here are some of the key requirements and guidelines that apply to SFBs aspiring to transition into universal banks: 

• Minimum paid-up capital/net worth requirement as applicable to universal banks
• A satisfactory performance track record of at least five years 
• Clearance in RBI’s due diligence exercise

• Shares should have been listed on a recognised stock exchange

• A minimum net worth of Rs 1,000 crore as at the end of the previous quarter (audited)

• Profitability for the last two financial years

• Having gross and net non-performing assets of up to a maximum of 3 per cent and 1 per cent in the last two financial years, respectively 

• Existing promoters, if any, may continue as the promoters; addition of promoters or change in promoters not allowed

• No new mandatory lock-in requirement of minimum shareholding for existing promoters

AU Small Finance Bank commenced operations in April 2017 after receiving a small finance bank licence from the RBI. It had received the in-principle nod in 2015. 

AU Small Finance Bank shares 

Earlier on Thursday, AU Small Finance Bank shares ended 1.3 per cent higher at Rs 744 apiece on BSE.

At the current level, AU Small Finance Bank shares — traded with the symbol AUBANK on stock exchanges BSE and NSE — have rewarded investors with a 31 per cent return in 2025 so far, sharply outperforming gains of 3.6 per cent and 8.7 per cent in the Nifty50 and Nifty Bank indices, respectively.

As of August 7, the stock has risen 18 per cent in a year, while Nifty50 and Nifty Bank have advanced 1.2 per cent and 10.8 per cent, respectively.