AU Small Finance Bank seeks RBI nod for universal bank licence

AU Small Finance Bank: AU Small Finance Bank has sought approval for a universal bank license from the country's central bank, the lender said on Tuesday.

In April, the Reserve Bank of India released a set of criteria that small lenders needed to meet to become universal banks.

The criteria included a five-year track record of satisfactory performance, a net worth of Rs 1,000 crore ($119.6 million), meeting capital requirements, recent profitability and limited non-performing assets.

A universal bank license can help small lenders expand their operations as they face limitations in terms of a smaller customer base and are restricted from granting large loans. These lenders are also not allowed to establish subsidiaries.

For the quarter-ended June 30, AU Small Finance Bank reported a 30 per cent year-on-year jump in net profit to Rs 503 crore, while its gross bad loans as a percentage of total loans stood at 1.78 per cent compared to 1.76 per cent a year earlier.