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News Topical, Digital Desk : Action can be seen in the stock of AU Small Finance Bank in Friday's session. In fact, on August 7, the Reserve Bank has given in-principle approval to convert the bank from Small Finance Bank to Universal Bank. On 3 September 2024, AU Small Finance Bank had given an application to the Reserve Bank to convert into a Universal Bank. With this approval, the bank will get a lot of help in expanding its reach and scope of services. The news came after the market closed on Thursday.
What will be the benefit to the bank
With this approval, the bank will be able to expand its business. The focus of Small Finance Bank is on low income group, small businessmen and people who do not have banking services. They have to provide services in villages and towns. However, the size, scope and reach of Universal Bank is much more than these. Universal Banks can open branches in India and abroad and can offer loans to big corporates. When the scope of business of a Small Finance Bank increases, it applies to the Reserve Bank for transition to Universal Bank so that it can take advantage of new opportunities. According to the rules, to convert into a Universal Bank, the Small Finance Bank should have a strong track record of 5 years, it is necessary to be listed in the market. And the net worth should be at least 1000 crores. Along with this, the Gross NPA of the Small Finance Bank should be less than 3 percent and Net NPA should be less than 1 percent in the last 2 years.
How were the quarterly results? In the first quarter, the bank's profit has increased by 16 percent on a year-on-year basis. Net interest income has increased by more than 6 percent. Gross NPA stood at 2.47 percent and net NPA at 0.88 percent.
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