RBI grants ‘In-principle’ Approval to AU Small Finance Bank Limited for transition into a Universal Bank
The Reserve Bank has decided to grant ‘in-principle’ approval to AU Small Finance Bank Limited (AUSFB) for transitioning from a Small Finance Bank (SFB) to a Universal Bank.
Background
It may be recalled that the Guidelines for licensing of Small Finance Banks in the Private Sector dated November 27, 2014 had provided a transition path for SFBs to convert into Universal Banks subject to the SFB’s fulfilling minimum paid-up capital/net worth requirement as applicable to Universal Banks, satisfactory track record of performance as an SFB for a minimum period of five years and RBI’s due diligence exercise. Further, with the objective of bringing better clarity, the eligibility criteria for an SFB to transition into a Universal bank were detailed in the Circular issued on April 26, 2024 on “Voluntary transition of Small Finance Banks to Universal Banks”.
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