India's AU Small Finance Bank seeks cenbank nod for universal bank license

AU Small Finance Bank

03/09/2024 14:48

BENGALURU, Sept 3 (Reuters) - India's AU Small Finance
Bank  AUFI.NS  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 10 billion rupees 
($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% year-on-year jump in net profit to 5.03 billion
rupees, while its gross bad loans as a percentage of total loans
stood at 1.78% compared to 1.76% a year earlier.
 

($1 = 83.9270 Indian rupees)

 (Reporting by Nishit Navin; Editing by Sonia Cheema)
 ((Nishit.Navin@thomsonreuters.com;))