The journey of Sanjay Agarwal, promoter and Managing Director & CEO of AU Small Finance Financial institution (AU SFB), which acquired an approval from the RBI to develop into a common financial institution Thursday, entails a narrative of each resilience and dedication that’s reflective within the small finance financial institution’s rising profile. It’s the first ‘small finance financial institution’ to make it to the large league.
On the coronary heart of AU’s extraordinary journey is Agarwal, whose story exemplifies India’s enterprise ethos. In 1996, at simply 26, the newly certified Gold-medallist Chartered Accountant from Jaipur, a first-generation entrepreneur and cricket fanatic, declined a standard company profession to start out his personal finance firm with a singular perception that “India’s underserved and unbanked deserved dignified monetary providers”. Beginning with no institutional capital and no inherited affect, Agarwal established a lending firm targeted on providing car finance to small entrepreneurs throughout Rajasthan’s heartland, the financial institution stated.
When he turned 25, Sanjay made the daring determination to return to Jaipur and lay the muse for AU Financiers (India) Ltd, a small finance firm geared toward offering loans for small automobiles. Sanjay, in accordance with financial institution insiders, labored to achieve the belief of native businessmen and buyers, leveraging strategic partnerships and a eager deal with customer support to carve out a distinct segment for AU Financiers in Rajasthan’s monetary panorama.
AU’s title originated from the Latin phrase ‘aurum’, which suggests gold. The actual turning level within the enterprise got here in 2015 when the Reserve Financial institution of India (RBI) launched the Small Finance Financial institution (SFB) class to advertise monetary inclusion. AU Financiers, with its two-decade observe report of constructing loans and accumulating on them, was seen as well-positioned to make the most of this chance. In 2017, AU Financiers reworked into AU Small Finance Financial institution, marking a big milestone in Sanjay’s entrepreneurial journey.
Right this moment, it’s one in every of India’s extra invaluable banks, with a market capitalisation of over Rs 55,000 crore, larger than many established private and non-private banks. “We now have made historical past by receiving in-principle approval from the Reserve Financial institution of India to transition right into a common financial institution. This milestone is a reaffirmation of our goal, perseverance, and fervour. AU isn’t just a financial institution – AU is a mission. At AU, we’ve got lived this mission daily. Our journey has all the time gone past banking – it’s about constructing a extra inclusive, empowered, and enterprising India,” Agarwal stated in a convention on Friday, a day after getting the licence from the RBI.
“This in-principle approval acknowledges not simply our means to develop, however to develop responsibly. It’s a testomony to AU’s power in reaching broadly, integrity in serving properly, and resilience to shine throughout financial cycles,” he stated in Mumbai.
The Agarwal household holds 21.4 per cent stake within the financial institution with Sanjay himself holding 15.73 per cent stake value Rs 8,700 crore (almost $1 billion). “After I based AU Financiers 29 years in the past, I seized an unbelievable alternative to decode India’s distant and sometimes unbanked areas, offering much-needed credit score to those areas. A major transformation occurred in 2017 when AU Financiers advanced into AU Small Finance Financial institution,” Agarwal wrote in his LinkedIn submit. “This evolution strengthened our attain and functionality, enabling us to ignite perception and unlock the potential of everybody linked with us, thereby making a profound influence on an unlimited variety of individuals,” he wrote within the submit.
On the time of commencing operations, AU SFB was the one asset financing non-bank financier to obtain the coveted license from the RBI out of a pool of 72 candidates. Inside the very first yr of beginning its banking operations, AU turned a scheduled industrial financial institution. The identical yr, the financial institution got here out with its IPO, which went on to develop into one of many main public listings of 2017 because the lender raised almost Rs 2,000 crore.
Story continues beneath this advert
Since then, AU SFB has emerged as India’s largest small finance financial institution, with a community of over 2,505 banking touchpoints throughout 21 states and 4 Union Territories, serving greater than 1.16 crore prospects with a workforce of round 53,000. As of June 2025, the financial institution has shareholders’ funds of Rs 17,800 crore, deposits of Rs 1.28 lakh crore, a mortgage portfolio of Rs 1.18 lakh crore, with the stability sheet measurement at Rs 1.61 lakh crore.
“Coming from a humble background in Jaipur, if somebody had informed me that we might construct the biggest small finance financial institution in India, I’d have discovered it laborious to consider. But right here we’re—as a result of I dared to dream and adopted my ardour. The outcomes converse for themselves,” Agarwal stated in his LinkedIn submit.
He’s now gearing as much as be within the large league, together with his financial institution getting the coveted common banking licence.