AU Small Finance Bank To Change Ownership Structure As RBI Mandates Non-Financial Holding Company
"AU Small Finance Bank has evolved from a non-banking finance company to a small finance bank and now to a universal bank," Chairman HR Khan said.
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(Photo: AU Small Finance Bank/Facebook)
The Reserve Bank of India has granted AU Small Finance Bank an 18-month window to complete its transition into a universal bank, with a key condition that promoter shareholding be routed through a non-financial holding company, the management said at a press conference.
Under the plan, the 21.4% stake held by Managing Director Sanjay Agarwal and his family, along with other promoters, will be transferred to this new entity.
"This is the only condition the RBI has laid out," the management said at a press briefing, adding that the bank was the first to apply for such a transition after the central bank's 2024 guidelines provided clarity on the glide path.
RBI's approach is that "you need some experience to graduate to the next stage," Chairman HR Khan said.
"AU Small Finance Bank has evolved from a non-banking finance company to a small finance bank and now to a universal bank," he said.
With a balance sheet larger than some small commercial banks, the bank said that it already operates at the scale of a universal bank and is now preparing for a smooth regulatory transition.
He also said that the bank has invested heavily in technology and talent and that it has achieved this result based on the best of tech and capable manpower.
