India’s AU Small Finance Bank has received 'in-principle' approval to transition into a universal bank—the first such license granted in nearly ten years—ushering in new growth potential for loans, subsidiaries, and customer reach.
AU Small Finance Bank, based in Jaipur, has secured a major milestone by receiving the central bank’s approval to become a universal bank—the first small finance bank to do so since 2015. This status elevation allows the bank to expand its services beyond its traditional constraints: it can now grant larger loans, diversify into subsidiaries, and broaden access to a wider range of customers.
The bank’s strong financial track record supported the decision. Despite a respectably growing net profit—up 16% year-on-year—the bank has maintained disciplined capital metrics and acceptable asset quality, despite a marginal rise in non-performing assets. This strategic shift aligns with broader national objectives to deepen financial inclusion, especially in underserved regions.
Moving forward, the bank’s expanded scope may sharpen competitive pressures on both regional and national lenders, while boosting access to credit and stimulating local economic activities.
India universal banking license, AU Small Finance Bank, RBI approval, banking growth, financial inclusion