AU Small Finance Bank Ltd. has submitted its final application for a universal banking license after the Reserve Bank of India relaxed the non-operative holding company requirement, financial daily The Economic Times reported. The Jaipur-based lender had received in-principle approval from the regulator in August last year.
The bank is fully prepared technologically and product-wise for the transition, executive director Vivek Tripathi told the publication.
Last month, the small finance bank said the RBI has replaced a rule that requires promoter and promoter group shareholding in the proposed universal bank to be held through a non-operative financial holding company. Now, the holding company structure will only become necessary if the bank or its promoters decide to establish any additional group entities in the future.
A small finance bank must have a satisfactory track record of performance for a minimum period of five years. Its shares must be listed on a recognised stock exchange and should have a minimum net worth of Rs 1,000 crore at the end of the audited previous quarter, according to the RBI's guidelines for conversion into a universal bank from a small finance bank.
The bank should meet the prescribed capital-to-risk-assets ratio requirements of 15% for small finance banks. A small finance bank must also have a net profit in the last two financial years and a gross non-performing assets and net bad loan ratio of below or equal to 3% and 1%, respectively, in the same period.
AU Small Finance Bank reported a 65% surge in net profit at Rs 832 crore in the fourth quarter of fiscal 2026. Net interest income increased by 23% to Rs 2,582 crore compared to Rs 2,094 crore in the preceding fiscal. Gross non-performing assets were at 2.03% sequentially, compared to the previous quarter's 2.3%.
The firm also declared a dividend of Rs 1.
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