MUMBAI, February 13, 2026, 18:30 (IST)
- Sanjay Agarwal has received the RBI’s nod to stay on as managing director and CEO of AU Small Finance Bank for another three years, starting April 19.
- The move leaves the founder in charge while AU pushes ahead with plans to become a universal bank, pending more regulatory hurdles.
- AU shares slipped roughly 0.6% Friday.
AU Small Finance Bank founder Sanjay Agarwal will stay on as managing director and chief executive for another three years starting April 19, after the Reserve Bank of India signed off on his reappointment, the lender said late Thursday in an exchange filing. The RBI’s approval letter, dated Feb. 12, followed earlier clearances from the board and shareholders back in October and December. 1
This decision is a big deal for AU, which is pushing to become a universal bank — a step up from its current small finance bank status. AU got in-principle approval on Aug. 7, 2025, to make the switch, after filing its application in September 2024, Reuters reported. 2
The regulator has handed AU an 18-month runway to finish the transition, ETBFSI reported. Sticking with Agarwal as chief for now means the bank keeps some consistency during that stretch—unless the schedule changes. 3
Chairman Harun R Khan said, “Continuity at the top ensures that our strategic priorities are pursued with clarity.” Agarwal called the approval “deeply humbling,” adding, “Their confidence in AU’s governance, culture and long-term vision is deeply humbling.” AU reiterated that moving to a universal bank still needs final RBI sign-off. As of Dec. 31, deposits stood at 138,415 crore rupees, with the loan book at 129,898 crore (1 crore = 10 million).
Agarwal took over as managing director at AU Financiers back on Feb. 14, 2008, and has led AU Small Finance Bank since its conversion on April 19, 2017, PTI reported. His existing term is set through April 18, 2026. 4
According to Economic Times, AU stood out as the top small finance lender at the end of December 2025, holding roughly 1.30 lakh crore rupees (about 1.3 trillion)—a jump of 20% from the previous year. Last month, Agarwal described the bank as “well positioned to scale with purpose” after posting a 26% increase in third-quarter net profit, reaching 668 crore rupees. 5
AU shares slipped 0.57%, ending Friday at 994.90 rupees, Investing.com data showed. 6
Still, the move to a universal bank isn’t locked in yet. Final sign-off can take time, and AU faces pressure to keep its books tight and controls solid as it takes on the weight of a broader licence.
Back in April 2024, the RBI put forward a voluntary roadmap for small finance banks to make the switch. AU moved quickly, filing early. According to Business Standard, Ujjivan Small Finance Bank and Jana Small Finance Bank have also sought approval for conversion, though the RBI hasn’t cleared their applications yet. 7
The RBI’s 2024 roadmap lays out that small-finance banks aiming for universal status need at least five years of solid track records and a net worth hitting 10 billion rupees, Reuters reported back then. Unlike universal banks, small finance lenders are still held back—there are restrictions on loan sizes and limits on launching subsidiaries. 8
