AU Financiers gets final licence from RBI to start small finance bank1 min read . Updated: 28 Dec 2016, 02:22 AM IST
AU Financiers was the only non-banking finance company among the 10 entities to receive in-principle approvals to start small finance banks in September 2015
Mumbai: AU Financiers (India) Ltd on Tuesday said it has received the final licence from the Reserve Bank of India (RBI) to start a small finance bank, becoming the seventh entity to do so.
AU Financiers was the only non-banking finance company (NBFC) among the 10 entities to receive in-principle approvals to start small finance banks in September 2015.
“The transition of AU Financiers from an NBFC into a small finance bank is a natural progression for us. It will enable us to serve entire bouquet of financial services to our under-served customer base thereby furthering financial inclusion," Sanjay Agarwal, managing director of AU Financiers said in a press release.
AU Financiers has finalized four investment bankers to manage its proposed share sale slated for early next year, Mint reported on 7 December. Central bank guidelines require small finance banks to maintain foreign shareholding below 49%.
AU Financiers recently cut its foreign holding to 49%, the maximum allowed for a small finance bank, after Kedaara Capital, ChyrsCapital Investment Advisors India Pvt. Ltd, International Finance Corp. and Warburg Pincus Llc sold some of their stakes in the company. Motilal Oswal Private Equity made a complete exit.
Janalakshmi Financial Services Pvt. Ltd, Disha Microfin Pvt. Ltd and RGVN (North East) Microfinance Ltd are yet to receive the final nod from the central bank. So far, only Capital Small Finance Bank and Equitas Small Finance Bank have started operations.
The licence holders need to start operations by March next year before the in-principle approval lapses.