AU Small Finance Bank Share Price Jumps 8% After RBI’s Universal Bank Nod

Market Performance

Shares of AU Small Finance Bank witnessed a sharp surge of 7.7% on Friday, August 8, reaching ₹800 in early trade.

• Intra-day gain: Up by 8%
• Current share price: ₹800
• Year-to-date growth: Nearly 40%
• Recent correction recovery: The latest rally helped trim previous monthly losses

This strong upward movement followed the Reserve Bank of India's (RBI) regulatory approval.

Main News

AU Small Finance Bank has obtained in-principle approval from the RBI for its transition into a Universal Bank.

• The approval was granted under the “On-Tap” licensing guidelines introduced in April last year
• AU Small Finance Bank is now the first Small Finance Bank in India to achieve this milestone under the new framework
• The application for conversion was submitted in September last year, and the decision came after 11 months

Company Details

AU Small Finance Bank is currently the largest Small Finance Bank (SFB) in India based on loan book size.

• Loan book size: Over ₹1 lakh crore
• YoY growth in Q1: 23%
• Comparatively, Equitas holds the second spot with a loan book of ₹38,000 crore

This milestone now sets the stage for other SFBs such as Ujjivan Small Finance Bank and Jana Small Finance Bank, which have also applied for universal banking licenses in February and June respectively.

Summary of the Article

The AU Small Finance Bank share price surged following the RBI’s approval to transition into a Universal Bank, marking a significant industry milestone. The bank, which holds a dominant position among SFBs, recorded a substantial loan book growth of 23% and now sets a precedent for similar institutions seeking to expand their regulatory scope. The announcement triggered positive investor sentiment, driving the stock up by nearly 8% in a single session and contributing to its 40% YTD gains.