The lender had applied for the licence in September 2024. A universal bank status would allow AU SFB to scale up operations by offering larger loans, serving a wider customer base, and forming subsidiaries — activities currently restricted under the small finance bank framework.
The RBI first issued guidelines in 2014 for small finance banks seeking to upgrade and revised them in April 2024. Criteria include a minimum five-year track record, net worth of at least ₹1,000 crore, compliance with capital adequacy norms, consistent profitability, and a manageable level of non-performing assets.
The last universal bank licence was granted in 2015 to Kolkata-based Bandhan Bank, which had transitioned from a microfinance firm.
For the quarter ended June 30, AU Small Finance Bank posted a 16% year-on-year rise in net profit to ₹581 crore. However, its gross non-performing assets ratio rose to 2.47% from 1.78% a year ago.
