Overview

• The Reserve Bank of India granted AU Small Finance Bank in-principle approval to transition to a universal bank, the first such upgrade in nearly a decade.
• The approval is valid for 18 months during which the bank must meet minimum paid-up capital and net-worth requirements.
• Promoter shareholding will need to be rerouted through a non-financial holding company as per RBI governance norms.
• Attaining universal bank status will lift loan size caps, allow larger borrower exposures and permit the formation of subsidiaries.
• The nod follows Q1 FY26 results showing a 16% rise in net profit to Rs 581 crore alongside a rise in gross NPAs to 2.47%, highlighting both growth and asset‐quality challenges.