The Reserve Bank of India (RBI) has granted in-principle approval to AU Small Finance Bank to transition into a universal bank. This allows AU to begin the process of meeting the regulatory and operational requirements necessary for the change in status.
Once converted, AU will be allowed to offer the full range of banking services, including handling large corporate loans, issuing credit cards, and engaging in foreign exchange transactions. This differs from the current scope of small finance banks, which are limited to specific segments.
Last month, AU SFB announced a net profit of ₹581 crore for the Q1FY26. This represents a 16% increase from the ₹502.57 crore profit reported during the same period the previous year. The bank's net interest income also grew by 6.45% annually, reaching ₹2,045 crore compared to ₹1,921 crore last year.
AU SFB serves over 1.16 crore customers through a vast network of more than 2,505 locations in 21 states and 4 union territories. The bank's operations are supported by a workforce of over 53,000 employees. As of June 30, 2025, the bank's financial highlights include a balance sheet size exceeding ₹1.60 lakh crore, a deposit base of ₹1,27,696 crore, a total loan portfolio of ₹1,17,624 crore, and shareholders' funds of ₹17,800 crore.
As per news reports, AU is the first among small finance banks to publicly announce receiving in-principle approval for universal banking. This transition aligns with RBI’s broader approach to allow well-performing institutions to expand their services gradually.
Read more: AU Small Finance Bank and LIC Partner to Expand Life Insurance Access!
As of 10:39 AM on August 8, 2025, AU Small Finance Bank share price was trading at ₹755.10, a 1.59% increase.
The approval is the start of a regulatory process that may lead to AU Small Finance Bank becoming a universal bank. The bank will now work toward fulfilling the necessary conditions for final clearance from the RBI.
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Published on: Aug 8, 2025, 11:22 AM IST
Team Angel One
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