AU Small Finance Bank shares surge nearly 8% as RBI nods for universal bank status

The RBI's approval came after AU Small Finance Bank fulfilled RBI's minimum paid-up capital/net worth requirement as applicable to become a universal bank. The bank showcased satisfactory track record of performance as aa SFB for a minimum period of five years and also fulfilled RBI’s due diligence exercise.

At the time of writing the article, shares of the lender were trading at ₹759.90 apiece on the National Stock Exchange, gaining 2.24%. However, it lost momentum and closed at ₹736.95 per share, tumbling 0.85% on Friday.

With the RBI notification, AU becomes the first Small Finance Bank in India to receive this in-principle approval to become a universal bank.

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.

This regulatory approval is a strong validation of AU's robust business model, sound governance, and enduring commitment to financial inclusion, AU Small Finance Bank said in a statement.

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.

Commenting on the development, the bank's MD and CEO, Sanjay Agarwal, 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."

"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," he added.

AUSFB has a network of over 2,505 banking touchpoints across 21 states and 4 Union Territories. It has a customer base of over 1.15 crore and a workforce of more than 53,000 at the end of June 2025.

As of June 30, 2025, the bank has shareholders' funds of ₹17,800 crore, a deposit base of ₹1,27,696 crore, a total loan portfolio of ₹1,17,624 crore and a balance sheet size of ₹1.60 lakh crore.

Last month, the lender had reported a net profit of ₹581 crore in the first quarter of the current financial year, marking an increase of 16% from ₹502.57 crore in the same period last year. Its net interest income came in at ₹2,045 crore as against ₹1,921 crore, up 6.45% annually.

AU Small Finance Bank, a scheduled commercial bank, is India’s largest small finance bank. Founded in 1996 by first-generation entrepreneur Sanjay Agarwal, AU began its banking operations in April 2017.