MUMBAI, February 13, 2026, 18:30 (IST)
- RBI has approved Sanjay Agarwal’s reappointment as AU Small Finance Bank’s MD and CEO for another three-year term from April 19
- The decision keeps the founder at the helm as AU works toward converting into a universal bank, subject to further regulatory steps
- AU shares ended down about 0.6% on Friday
The Reserve Bank of India has approved the reappointment of AU Small Finance Bank founder Sanjay Agarwal as managing director and chief executive for another three-year term starting April 19, the lender said in an exchange filing late on Thursday. The central bank’s approval letter was dated Feb. 12 and came after the bank’s board and shareholders signed off on the plan in October and December. (Business Standard)
The decision matters because AU is trying to move up into a universal bank — a full-service lender that can do more than a small finance bank. AU received in-principle approval on Aug. 7, 2025, to convert after it applied in September 2024, Reuters reported at the time. (Reuters)
ETBFSI reported the regulator has given AU 18 months to complete the transition. Keeping Agarwal in the top seat gives the bank continuity through that window, assuming the timetable does not slip. (ETBFSI.com)
Chairman Harun R Khan said, “Continuity at the top ensures that our strategic priorities are pursued with clarity,” while Agarwal said the approval showed “Their confidence in AU’s governance, culture and long-term vision is deeply humbling.” AU said its universal bank transition is still subject to final RBI approval, and put its deposits at 138,415 crore rupees and its loan book at 129,898 crore as of Dec. 31 (1 crore = 10 million).
Agarwal first became managing director of AU Financiers on Feb. 14, 2008 and has run AU Small Finance Bank since it converted into a bank on April 19, 2017, according to a PTI report. His current term runs to April 18, 2026. (Devdiscourse)
Economic Times reported AU was the largest small finance lender with about 1.30 lakh crore rupees (about 1.3 trillion) as of end-December 2025, up about 20% from a year earlier. Agarwal last month said the bank was “well positioned to scale with purpose” after it reported a 26% rise in third-quarter net profit to 668 crore rupees. (The Economic Times)
AU shares closed down 0.57% at 994.90 rupees on Friday, according to Investing.com data. (Investing)
But the universal bank shift is not a done deal. The final approval step can drag, and AU will have to keep its numbers and controls in line while it absorbs the demands of a bigger licence.
RBI laid out a voluntary transition path for small finance banks in April 2024, and AU was among the early applicants. Business Standard has reported Ujjivan Small Finance Bank and Jana Small Finance Bank also applied for conversion, with their requests pending with the regulator. (Business Standard)
In the 2024 roadmap, the RBI said would-be universal banks from the small-finance pool must show at least five years of satisfactory performance and a net worth of at least 10 billion rupees, among other tests, Reuters reported at the time. Small finance banks face limits on areas such as loan size and setting up subsidiaries, which universal banks can do. (Reuters)
