AU Small Finance Financial institution applies to RBI to transition to a common financial institution

AU Small Finance Financial institution on Tuesday submitted an utility to the Reserve Financial institution of India to hunt approval for the voluntary transition from a Small Finance Financial institution (SFB) to a Common Financial institution.

This utility comes within the backdrop of Fincare Small Finance Financial institution (Fincare SFB) amalgamating with and into AU SFB with impact from April 1, 2024, marking the primary such consolidation within the SFB house.

“This strategic evolution will pave the way in which for our future development, improve our model presence, wider acceptance, scale back regulatory constraints, and enhance operational effectivity,” stated Sanjay Agarwal, Founder, MD & CEO, in a communication to shareholders.

In April 2024, the RBI issued a round permitting the voluntary transition of Small Finance Banks to Common Banks and AU SFB is the primary Financial institution to hunt regulatory approval for the transition.

To qualify, as per the RBI pointers, SFBs want a five-year monitor report, robust financials, and a inventory alternate itemizing amongst numerous different parameters.

As of June-end 2024, AU SFB’s deposits and advances stood at ₹97,290 crore and ₹99,792 crore, respectively. The web revenue at ₹503 crore in Q1’FY25 grew 30 per cent y-o-y in comparison with ₹ 387 crore in Q1FY24.