AU Small Finance Bank

AU Small Finance Bank traces its origins to 1996, when Sanjay Agarwal, a first-generation entrepreneur and chartered accountant, founded AU Financiers (India) Ltd in Jaipur. Declining a traditional corporate career, Agarwal established the company to offer vehicle finance to small entrepreneurs, focusing on the underserved and unbanked populations in Rajasthan's heartland. His journey was marked by early challenges, including the 1997 Chain Roop Bhansali investment scam which eroded public trust in non-banking financial companies (NBFCs). A pivotal moment came in 2003 through a strategic partnership with HDFC Bank, which allowed AU Financiers to expand its services.

The institution operated as an NBFC for two decades, gradually expanding its product portfolio and geographic reach. A significant transformation occurred in 2015 when the Reserve Bank of India (RBI) introduced the Small Finance Bank (SFB) category, and AU Financiers was the only asset-financing NBFC to receive an in-principle license out of 72 applicants. It commenced operations as AU Small Finance Bank on April 19, 2017, and subsequently launched a successful IPO in June 2017, getting listed on the BSE and NSE. Key milestones include becoming a scheduled commercial bank in November 2017, merging with Fincare Small Finance Bank in April 2024, and receiving an in-principle approval from the RBI in August 2025 to transition into a universal bank.

The bank's business model is centered on serving the retail and MSME segments in rural and semi-urban areas, which have historically had limited access to formal finance. Revenue is generated primarily through net interest income from its loan portfolio and fees from other financial services. Its operations are divided into treasury, retail banking, and wholesale banking. The bank has built a robust model focused on small-ticket, secured retail loans for income generation purposes, with a significant portion of its loan book comprising vehicle and business loans. For individuals, AU Small Finance Bank offers a comprehensive suite of products including savings and current accounts, fixed deposits, various loans (vehicle, home, personal, gold), credit cards, insurance, and investment services like mutual funds. Its commercial banking division caters to MSMEs, corporates, and government bodies, providing transaction banking, working capital loans, term loans, and trade finance solutions. The bank leverages a "phygital" strategy, combining a wide network of physical branches with digital channels like the AU 0101 mobile app, internet banking, and WhatsApp banking to deliver its services.

Keywords: AU Small Finance Bank, Sanjay Agarwal, retail banking, wholesale banking, small finance bank, NBFC, vehicle finance, MSME loans, financial inclusion, Indian banking, Jaipur, secured lending, digital banking, AU 0101, Fincare Small Finance Bank merger, universal bank, personal banking, commercial banking, agricultural finance, treasury operations