{"id":344229,"date":"2025-08-09T17:38:54","date_gmt":"2025-08-09T12:08:54","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=344229"},"modified":"2025-08-09T17:38:54","modified_gmt":"2025-08-09T12:08:54","slug":"rbi-grants-au-small-finance-bank-universal-license-first-in-a-decade","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/rbi-grants-au-small-finance-bank-universal-license-first-in-a-decade\/","title":{"rendered":"RBI Grants AU Small Finance Bank Universal License, First in a Decade"},"content":{"rendered":"<p><strong>News:<\/strong> The Reserve Bank of India has granted AU Small Finance Bank a universal banking license, the first in a decade, potentially paving the way for other small finance banks to transition.<\/p>\n<h2>RBI Grants AU Small Finance Bank Universal License, First in a Decade<\/h2>\n<figure id=\"attachment_344230\" aria-describedby=\"caption-attachment-344230\" style=\"width: 422px\" class=\"wp-caption aligncenter\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\" wp-image-344230\" src=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/08\/Source-CNBC-TV.jpg?resize=422%2C232&#038;ssl=1\" alt=\"\" width=\"422\" height=\"232\" srcset=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/08\/Source-CNBC-TV.jpg?resize=300%2C165&amp;ssl=1 300w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/08\/Source-CNBC-TV.jpg?resize=768%2C423&amp;ssl=1 768w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/08\/Source-CNBC-TV.jpg?w=1016&amp;ssl=1 1016w\" sizes=\"auto, (max-width: 422px) 100vw, 422px\" \/><figcaption id=\"caption-attachment-344230\" class=\"wp-caption-text\">Source &#8211; CNBC TV<\/figcaption><\/figure>\n<ul>\n<li>The license was given under the <strong>RBI\u2019s \u2018on tap\u2019 licensing guidelines<\/strong> and the <strong>framework<\/strong> <strong>for the voluntary conversion of small finance banks to universal banks. <\/strong><\/li>\n<li><strong>Eligibility criteria:<\/strong>\n<ul>\n<li>The <strong>listed<\/strong> small finance banks with <strong>minimum net worth of Rs 1,000 crore at the end of the previous quarter<\/strong> are eligible to apply for a transition.<\/li>\n<li>They also need to have a <strong>minimum 15% capital to risk-weighted assets ratio<\/strong> and <strong>net profits in the preceding two financial years. <\/strong><\/li>\n<li><strong>NPAs:<\/strong> Their <strong>gross non-performing assets<\/strong> has to be <strong>less than or equal to 3%<\/strong> for <strong>two preceding<\/strong> <strong>financial years<\/strong> while the <strong>net non-performing assets<\/strong> has to be <strong>less than or equal to 1%<\/strong> for two preceding financial years.<\/li>\n<li>They should also meet the <strong>prescribed CRAR requirements<\/strong> for SFBs.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Importance:<\/strong> The universal bank status will allow AU Bank to offer a wide range of financial services and products under one roof without many restrictions unlike a small finance bank.<\/li>\n<li><strong>Past examples:<\/strong> The last time RBI granted universal banking license to <strong>Bandhan Bank and IDFC Bank (now IDFC First Bank) was in April 2014.<\/strong><\/li>\n<\/ul>\n<h2>About Small Finance Banks<\/h2>\n<ul>\n<li>Small Finance Banks are <strong>specialized financial institutions<\/strong> set up to foster <strong>financial inclusion<\/strong> by delivering <strong>basic banking services<\/strong> to underserved and unbanked segments of the population.<\/li>\n<li><strong>Genesis:<\/strong> Announced in the Union <strong>Budget of 2014-15<\/strong><\/li>\n<li><strong>Key Features of SFBs:<\/strong>\n<ul>\n<li><strong>Regulated by RBI:<\/strong> Function under the <strong>Banking Regulation Act, 1949<\/strong>, and other relevant laws.<\/li>\n<li><strong>Basic Banking Services:<\/strong> Offer savings accounts, current accounts, fixed deposits (FDs), recurring deposits (RDs), and loans.<\/li>\n<li><strong>Scheduled Bank Status:<\/strong> Granted upon meeting eligibility criteria under the RBI Act, 1934.<\/li>\n<li><strong>Priority Sector Focus:<\/strong> Required to allocate at least 60% of ANBC to PSL sectors like agriculture and MSMEs.<\/li>\n<li><strong>Capital Requirement:<\/strong> Must have a minimum paid-up capital of \u20b9200 crore.<\/li>\n<li><strong>No Subsidiaries:<\/strong> Not allowed to set up subsidiaries for non-banking financial services<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>News: The Reserve Bank of India has granted AU Small Finance Bank a universal banking license, the first in a decade, potentially paving the way for other small finance banks to transition. RBI Grants AU Small Finance Bank Universal License, First in a Decade The license was given under the RBI\u2019s \u2018on tap\u2019 licensing guidelines&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/rbi-grants-au-small-finance-bank-universal-license-first-in-a-decade\/\">Continue reading <span class=\"screen-reader-text\">RBI Grants AU Small Finance Bank Universal License, First in a Decade<\/span><\/a><\/p>\n","protected":false},"author":10393,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,12039],"tags":[11872],"class_list":["post-344229","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-knolls","tag-9pm-daily-factly","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/344229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10393"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=344229"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/344229\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=344229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=344229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=344229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}