The Reserve Bank has decided to grant 'in-principle' approval to AU Small Finance Bank Limited (AUSFB) for transitioning from a Small Finance Bank (SFB) to a Universal Bank.
Background
It may be recalled that the Guidelines for licensing of Small Finance Banks in the Private Sector dated November 27, 2014 had provided a transition path for SFBs to convert into Universal Banks subject to the SFB's fulfilling minimum paid-up capital/ net worth requirement as applicable to Universal Banks, satisfactory track record of performance as an SFB for a minimum period of five years and RBI's due diligence exercise. Further, with the objective of bringing better clarity, the eligibility criteria for an SFB to transition into a Universal bank were detailed in the Circular issued on April 26, 2024 on 'Voluntary transition of Small Finance Banks to Universal Banks'.
AU Small Finance Bank Limited is an India-based non-deposit accepting non-banking financial company (NBFC-ND). The Company is engaged in providing a range of banking and financial services, including retail banking, wholesale banking and treasury operations and other services. Its segments include treasury, retail banking, wholesale banking, and other banking businesses. The treasury segment primarily consists of interest from investment portfolios, money market borrowing and lending. The retail banking segment include digital banking, and other retail banking. The wholesale banking segment provides loans and transaction services to large corporates, emerging corporates, public sector units, government bodies, financial institutions, and medium scale enterprises. Its personal banking includes savings account, salary account, and fixed deposits. It offers various types of loans, which include car loan, home loan, personal loan, tractor loan and others.
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