AU Small Finance Bank Share Price in Focus Gains Approval to Raise Foreign Investment Limit to 74%

AU Small Finance Bank has announced that it has secured approval from the Department of Financial Services to increase its foreign investment ceiling to the maximum permitted level of 74%.

The decision, communicated on 9 December 2025, is intended to create additional capacity for overseas participation under existing regulatory frameworks. The development comes as the bank’s shares recorded a decline in the latest trading session.

Approval to Increase Foreign Investment Limit

The bank confirmed that the Department of Financial Services, Ministry of Finance, has authorised an increase in its foreign investment limit from 49% to 74% of its paid-up capital. 

This approval aligns with the upper threshold allowed for private sector banks under current policy.

 According to the communication, any Foreign Direct Investment, as defined under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, will require prior approval from the Department of Financial Services. 

The bank stated that the expanded limit will provide adequate capacity for future foreign investment within the framework of the consolidated FDI Policy. The approval carries no expiry period.

Regulatory Context

In private sector banks, foreign investment is permitted up to 74%. While investments up to 49% fall under the automatic route, any investment exceeding that level and up to the 74% cap must be reviewed through the government route. 

AU Small Finance Bank’s revised limit places it at the maximum level allowed under this structure.

AU Small Finance Bank Share Price Performance

Shares of AU Small Finance Bank ended the session at ₹971.00 on Dec 9, reflecting a decline of ₹18.45 or 1.94 percent on the BSE.

 The trading outcome indicates a measured market response as investors assessed the implications of the increased investment capacity.

Read More: Ashok Leyland Share Price in Focus Ahead of Upcoming Dividend Payout Expected on or Before 11 December 2025.

Conclusion

The approval to raise the foreign investment limit provides AU Small Finance Bank with enhanced flexibility under existing regulatory norms. 

With the expanded ceiling now in place, the bank is positioned to accommodate future foreign participation in accordance with applicable rules and oversight requirements.

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