AU Small Finance Bank Ready for Universal Leap
AU Small Finance Bank, under the leadership of Sanjay Agarwal, has received in-principle approval to transition into a universal bank. As part of this shift, Agarwal must move holdings to a non-operative financial holding company. This transition aims to maintain flexibility, ensure depositor protection, and avoid direct competition with larger banks.
- Country:
- India
The Reserve Bank of India has mandated that promoters of AU Small Finance Bank, led by Sanjay Agarwal, transition their holdings to a non-operative financial holding company before approving its operation as a universal bank.
Agarwal, who is the founder and CEO, stated that the bank aims to compete with non-bank finance companies rather than larger commercial banks. AU SFB received preliminary approval to become a universal lender, facilitating access to cheaper funding and expanding its lending portfolio.
The shift includes a focus on smaller-ticket retail loans, maintaining current business strategies until at least 2027. During this period, AU will rebrand, dropping the 'SFB' title to address customer perceptions, and will explore other financial services such as asset management and insurance.
(With inputs from agencies.)
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