AU Small Finance Bank to Apply for Universal Bank Licence
Jul 25, 2024 20:43
AU Small Finance Bank plans to apply for a universal bank license from RBI by August end, aiming to expand its operations and reach a wider customer base.
New Delhi, Jul 25 (PTI) AU Small Finance Bank Managing Director Sanjay Agarwal on Thursday said the lender will apply for universal bank licence to the Reserve Bank of India (RBI) next month.
"The board has decided to go for a universal licence and approved the constitution of a committee headed by chairman H R Khan," Agarwal told PTI.
The committee with other three members will oversee the application process, he said.
The bank has appointed a couple of consultants to help in filing applications, he said.
"We should be able to file in the next four weeks, may be by the end of August," he added.
The RBI in April invited applications from small finance banks meeting specified criteria, including a minimum net worth of Rs 1,000 crore, for becoming regular or universal banks.
The RBI, in November 2014, issued the guidelines for licensing of small finance banks (SFBs) in the private sector.
As per the April guidelines of the RBI, an SFB aiming to become a universal bank should have a minimum net worth of Rs 1,000 crore at the end of the previous quarter (audited) and the shares of the bank should have been listed on a recognised stock exchange.
It should also have a net profit in the last two financial years and Gross NPA and Net NPA of less than or equal to 3 per cent and 1 per cent, respectively, in the last two financial years.
Jaipur-based AU Small Finance Bank acquired Fincare Small Finance Bank and the merger became effective from April 1 this year.
With the merger effective April 1, the total business mix of the merged entity will cross Rs 1.8 lakh crore.
Earlier in the day, the bank announced a 30 per cent jump in net profit to Rs 502 crore for the June quarter.
During the quarter, the bank's total income increased to Rs 4,315 crore against Rs 2,773 crore a year ago.
Interest income grew to Rs 3,769 crore during the period under review from Rs 2,458 crore in the corresponding quarter a year ago.
However, the asset quality of the bank marginally deteriorated, with gross non-performing assets (NPAs) rising to 1.78 per cent of gross advances as of June 30, 2024, from 1.76 per cent by the end of the first quarter of the previous fiscal.
Its net NPAs also increased to 0.63 per cent of the advances from 0.55 per cent at the end of the first quarter of last year.
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