Скачать или смотреть Only AU Small Finance Bank is eligible for a Universal Banking License | Share.Market by Phonepe

After the RBI set new guidelines, AU Small Finance Bank stood out as the only Small Finance Bank (SFB) eligible to apply for a universal banking license. This led to a 6.5% increase in its share price on Monday, and the stock is testing its resistance levels.

The new guidelines specify certain criteria that an SFB must fulfill to apply for a universal bank license

[1] Minimum Net Worth of ₹1,000 crore
[2] Scheduled Status and a Solid Performance record for at least 5 years
[3] Listing on a stock exchange
[4] Profitability for the past two financial years
[5] Maintaining GNPA ≤ 3% and NNPA ≤ 1% in the past two financial years
[6] Meeting capital adequacy requirements
[7] Having a diversified loan portfolio

These criteria primarily revolve around net worth requirements, profitability, NPAs, and risk management. AU Small Finance Bank, the largest lender of the pack meets all these criteria set by the RBI.

But what are the benefits of transitioning from an SFB to a Universal Bank?

[1] Universal banks typically enjoy a higher brand value compared to SFBs, enabling them to cater to a larger customer base.

[2] The capital requirement for a Universal Bank is lower than that for SFBs, meaning they can lend more against the same capital and potentially earn higher profits.

[3] While SFBs are required to allocate 75% of their loans to priority sectors, Universal banks have a lower limit of 40%, allowing them to extend more loans to profitable sectors.


Follow Us
Instagram:   / sharedotmarket  
Linkedin:   / sharedotmarket  
Facebook:   / sharedotmarket  
Twitter:   / sharedotmarket  

Click here to download: https://sharemarket.onelink.me/uMHZ/c...
Disclaimer: https://share.market/terms-conditions

About PhonePe Wealth Broking: PhonePe Wealth Broking Private Limited, registered in April 2021 is a subsidiary of @PhonePe Private Limited and is registered with NSE and BSE as a Stock Broker, with CDSL as a Depository Participant and with AMFI as a Mutual Fund distributor. Launched in August 2023, Share.Market, a brand of PhonePe Wealth Broking, is a wealth and investment platform (app & website), catering to investors and traders of all expertise levels. The platform offers a wide range of investment products, including #stocks,#mutualfunds, #WealthBaskets, and more.