- First Small Finance Bank to receive in-principle approval to become a Universal Bank
- Key milestone in Sanjay Agarwal’s entrepreneurial journey of over three decades
In a moment that will go down in India’s banking history, AU Small Finance Bank (AU) has received an in-principle approval from the Reserve Bank of India (RBI) to become a Universal Bank. With this notification, AU becomes the first Small Finance Bank in India to receive this in-principle approval to become a Universal Bank, a milestone shaped by purpose, perseverance and discipline.
This regulatory approval is a strong validation of AU’s robust business model, sound governance, and enduring commitment to financial inclusion. More importantly, it affirms AU’s evolution into a complete bank, one that offers a full spectrum of banking products and services that today’s customer expects, spanning retail, business, and digital solutions.
The application for this transition was submitted on September 3, 2024, under the RBI’s ‘on tap’ licensing guidelines (August 2016) and April 2024 framework for the voluntary conversion of Small Finance Banks to Universal Banks.
At the heart of AU’s extraordinary journey is Mr. Sanjay Agarwal, Founder, MD & CEO of AU, whose story exemplifies India’s enterprise ethos. In 1996, at just 26, the newly qualified Gold-medallist Chartered Accountant from Jaipur, a first-generation entrepreneur and cricket enthusiast, declined a conventional corporate career to start his own finance company with a singular belief that India’s underserved and unbanked deserved dignified financial services. Starting with no institutional capital and no inherited influence, Mr. Agarwal established a lending company focused on offering vehicle finance to small entrepreneurs across Rajasthan’s heartland. What began as a modest dream has since become a case study in perseverance, masterclass of sustained growth, sharp execution, and institution building.
Mr. Sanjay Agarwal, Founder, MD & CEO of AU Small Finance Bank, said: “We have made history by receiving in-principle approval from the Reserve Bank of India to transition into a Universal Bank. This milestone is a reaffirmation of our purpose, perseverance, and passion.
AU is not just a bank – AU is a mission. As Hon’ble Prime Minister Narendra Modi Ji has rightly said, “India is not just a market. India is a mission.” At AU, we have lived this mission every day. Our journey has always gone beyond banking – it’s about building a more inclusive, empowered, and enterprising India.
We are deeply grateful to the Government of India and the Reserve Bank of India for nurturing an ecosystem where institutions like AU can grow with integrity. This achievement is a tribute to every stakeholder who has stood by us – our customers, whose trust has shaped us; our employees, whose energy powers us; our investors and partners, who believed in our model; and our Board of Directors, whose guidance has been instrumental in our journey.
This in-principle approval acknowledges not just our ability to grow, but to grow responsibly. It is a testament to AU’s strength in reaching widely, integrity in serving wisely, and resilience to shine across economic cycles. As we step into this new chapter, we do so with humility, responsibility, and the pride of a homegrown institution ready to serve – our people, our nation, and the vision of Viksit Bharat 2047.”
About AU Small Finance Bank
AU Small Finance Bank Limited (AU SFB) is a Scheduled Commercial Bank and has established itself as India’s largest Small Finance Bank since commencing its banking journey in April 2017. Founded in 1996 by Mr. Sanjay Agarwal, a first-generation entrepreneur, AU enters its 30th year of operations with a legacy of deep-rooted service—having built, over three decades including more than eight years as a bank, a sustainable and inclusive financial institution that empowers underserved and under-reached communities through a robust retail banking model. AU has received an in-principle approval from the Reserve Bank of India (RBI) to transition into a Universal Bank.
With deep customer insight across India, AU provides comprehensive banking solutions across deposits, loans, credit cards, premium banking, remittance services, merchant solutions, insurance, and investments. As a tech-led bank, AU offers differentiated digital experiences through innovations like 24×7 video banking, WhatsApp Banking, Chatbots, UPI QRs, merchant lending, and its award-winning AU 0101 app.
AU SFB’s wide network of over 2,505 banking touchpoints across 21 States and 4 Union Territories enables service to 1.16 crore customers, powered by a workforce of 53,000+ employees. As on 30th Jun’25, Bank has a Shareholders Funds of ₹17,800 Crore, Deposit base of ₹1,27,696 Crore, Total Loan Portfolio of ₹1,17,624 Crore and a Balance sheet size of ₹1.60 Lac Crore+.
AU SFB is listed on NSE and BSE and is rated ‘AA/Stable’ by CRISIL Ratings, ICRA Ltd., CARE Ratings, and India Ratings. Its Fixed Deposits carry a ‘AA+/Stable’ rating from CRISIL Ratings, reflecting its financial strength and investor trust.
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