AU Small Finance Bank (AUSFB) Thursday received the Reserve Bank of India’s (RBI) ‘in-principle’ approval to transition into a universal bank. 

The bank submitted its application to transition into a universal lender on September 3, 2024, under the RBI’s ‘on tap’ licensing guidelines (August 2016) and April 2024 framework for the voluntary conversion. “We have made history by receiving in-principle approval from the RBI to transition into a universal bank. This milestone is a reaffirmation of our purpose, perseverance, and passion,” said AUSFB founder, MD & CEO, Sanjay Agarwal. “AU is more than a bank, it is a mission,” he added, drawing from Prime Minister Narendra Modi’s statement that “India is not just a market, it is a mission.”

‘Universal’ journey 

The RBI approval was granted based on AU’s strong business model, sound governance, and lasting commitment to financial inclusion, the lender stated in an official release. AU added that it has evolved into a full-fledged bank, offering a comprehensive range of banking products and services that today’s customers expect, encompassing retail, business, and digital solutions.

"This in-principle approval acknowledges our ability to expand responsibly. It highlights AU’s strength in engaging a wide audience, maintaining integrity in service, and remaining resilient through economic cycles. As we embark on this new chapter, we do so with humility, responsibility, and pride as a homegrown institution ready to serve our people, our nation, and the vision of Viksit Bharat 2047,” Agarwal stated.

Who is Sanjay Agarwal?

At the core of AU’s remarkable journey is the founder, Sanjay Agarwal. In 1996, at just 26, the newly qualified gold-medal-winning Chartered Accountant from Jaipur, a first-generation entrepreneur and cricket fan, turned down a traditional corporate career to establish his own finance company. He believed that India’s underserved and unbanked populations deserved respectful financial services.

Starting with no institutional capital and no inherited influence, Agarwal founded a lending firm focused on providing vehicle finance to small entrepreneurs across Rajasthan. What began as a modest dream has since become a case study in perseverance and sustainable growth.