AU Small Finance Bank up 7%; first SFB to get RBI's universal bank approval

AU Small Finance Bank share price today: Shares of Rajasthan-based AU Small Finance Bank jumped over 7 per cent to hit an intraday high of ₹800 on the NSE after the private lender received regulatory approval from the Reserve Bank of India (RBI) for transition to a universal bank. 

 

At 10:15 AM, AU Small Finance Bank's share price was trading 1.7 per cent higher at ₹755.8 per share on the NSE. In comparison, NSE Nifty50 was down 0.6 per cent at 24,452 levels. The market capitalisation of the company stood at ₹56,263 crore. The stock has recovered 67 per cent from the 52-week low of ₹478.35 touched on March 18, 2025.  CHECK STOCK MARKET UPDATES TODAY LIVE 

 

In an exchange filing on August 7, AU Small Finance Bank said that it received in-principle approval from the RBI for transition from a Small Finance Bank (SFB) to a universal bank.

 

The central bank approval comes after the bank's letter dated September 3, 2024, seeking a universal bank license from the RBI. With this, AU Small Finance Bank became the first SFB to receive an in-principle approval to become a universal bank. 

 

"This regulatory approval is a strong validation of AU’s robust business model, sound governance, and enduring commitment to financial inclusion," the private lender said in a filing. 

 

"It affirms AU’s evolution into a complete Bank, one that offers a full spectrum of banking products and services that today’s customer expects, spanning retail, business, and digital solutions," it added.  ALSO READ | BSE shares drop 2% despite 'strong' Q1 results; what's spooking analysts?

Motilal Oswal Financial Services on AU Small Finance Bank

According to analysts at MOFSL, the in-principle approval to transition into a universal bank catapults AU SFB into the big league and highlights RBI's confidence in the bank's business operations and governance standards. This transition will be important in shaping the bank’s long-term path, offering regulatory benefits over private banks and creating new growth opportunities through relaxed compliance requirements.

 

"The recovery in earnings over second half as credit cost subsides along with industry leading loan growth, a potential capital raise to support robust growth, and the RBI’s approval for the CEO’s (Sanjay Agarwal) term renewal—due in April 2026 are additional near-term catalysts that reinforce confidence in the bank’s operational capabilities and long-term growth outlook," the brokerage said in a note.

 

MOFSL maintained a 'Buy' rating on the stock with a target price of ₹875, noting that the transition is expected to support overall growth and profitability outlook while significantly enhancing the bank’s profile.