MUMBAI: AU Small Finance Bank, which is the segmental leader, has applied to the Reserve Bank to voluntarily convert itself to a universal bank. If allowed, the move can help the lender expand its reach and services.
"We wish to inform that the bank has submitted an application to the Reserve Bank to seek approval for the voluntary transition from a small finance bank to universal bank today (September 3)" the Jaipur-based bank said in an exchange filing on Tuesday.
In July, AU Bank had said they would apply for the universal banking licence in about a four weeks. Its board approved the plan in July 25. The Sanjay Agarwal-founded bank is the only lender headquartered in Jaipur.
The eligibility criteria for a small finance bank to transition into a universal bank is that it must have a satisfactory track record of performance for at least five years, should be listed on stock exchanges, and should have a minimum net worth of Rs 1,000 crore.
Shares of AU Bank down 14 per cent so far this year. On June 20, private equity firm Westbridge Capital divested a 1.75 per cent stake in the lender for Rs 845 crore through an open market transaction. Earlier in June, the bank board had approved a fundraising of Rs 11,000 crore.