BENGALURU – India’s AU Small Finance Bank 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)
