Sanjay Agarwal, director and Chief Executive Officer, Au Small Finance Bank
AU Small Finance Bank (AU SFB) will transfer the shareholding of its promoter and promotor group -currently at nearly 23 percent -a non -operative financial holding (NOFHC), as part of its transition to a universal bank, MD & CEO Sanjay Agarwal told reporters here on Friday.
“The Reserve Bank of India (RBI) has given us 18 months to complete this transition,” he said. The SFB On July 7, the first lender in his category that received approval from the RBI for the transition to a universal bank regime. The bank was asked to transfer the shareholder of the promoter to NOFHC, as part of the in principle approval expanded by the supervisor.
Lower fund costs
Agarwal said that the immediate advantage that the SFB sees from the in principle approval of the RBI would be lower funds.
“We believe that this license will push our business momentum more, special (helping bank) funds collect funds at cheaper costs that will help us serve customers better. I don’t think our business model will undergo a huge change for 3-5 years …”, he said.
The problem with having a ‘small financial bank’ tag, said Agarwal, was that the ‘unnecessary discussions’ that employees had to have with customers. As SFB, customers often asked bank employees that it is a cooperative bank, accepts the large deposits, how secure the bank is and is as good as other banks.
“That unnecessary discussion was too much for my people to treat in the field. I think this license takes away all the challenges for people in the field and you can concentrate on the business community itself. If you get validation from regulator such as RBI, it sends a strong message to the public that this bank is safe enough,” said Agarwal.
The chairman HR Khan of AU SFB said that the lender would continue to have a retail franchise even after the conversion in a universal bank.
Published on August 8, 2025
#Small #Finance #Bank #transfer #promoter #NOHFC #part #transition #Universal #Bank #CEO