AU Small Finance Bank set to become universal bank, gets RBI’s in-principle approval 

/2 min read

ADVERTISEMENT

The RBI approval was granted based on AU’s strong business model, sound governance, and lasting commitment to financial inclusion, the lender stated 
THIS STORY FEATURES
AU Small Finance Bank Ltd Fortune 500 India 2024
AU Small Finance Bank set to become universal bank, gets RBI’s in-principle approval 
Sanjay Agarwal, MD and CEO, AU Small Finance Bank  Credits: Narendra Bisht
In this story
Profiles Mentioned in this article

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.

Fortune India Latest Edition is Out Now!
40u40: India's Brightest Young Business Minds

July 2025

In the world’s youngest nation—where over 65% of the population is under 35—India’s future is already being shaped by those bold enough to lead it. From boardrooms to breakout ideas, a new generation of business leaders is rewriting the rules. This year's Fortune India’s 40 Under 40 celebrates these changemakers—icons in the making like Akash Ambani, Kaviya Kalanithi Maran, Shashwat Goenka, Parth Jindal, Aman Mehta, and Devansh Jain—who are not just carrying forward legacies but boldly reimagining them for a new era. Alongside them are first-generation disruptors like Sagar Daryani, scaling Wow! Momo with a vision to take ₹100 momos to 5,000 cities, and Palak Shah, turning the Banarasi weave into a global fashion story with Ekaya Banaras. These are the entrepreneurs turning ambition into scale. And even beyond traditional industry, the entrepreneurial wave is pulling in creative forces—Ranveer Singh, for instance, is shaking up wellness and nutrition with Bold Care and SuperYou, proving that passion, backed by purpose, is the new blueprint for building brands.

Read Now

"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.

Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.