MUMBAI: RBI has granted its first universal bank approval in a decade, giving AU Small Finance Bank (SFB) in-principle approval to transition from an SFB to a universal bank-the first such nod since Bandhan and IDFC in 2015.Founded in 1996 by Sanjay Agarwal as AU Financiers, an NBFC in Jaipur, AU became an SFB in 2015. Backed by Warburg Pincus and Temasek, it is now the largest SFB by assets and the first to seek universal status under RBI’s new framework. Eligibility for the conversion includes Rs 1,000 crore net worth, five years’ operations, exchange listing, recent profitability, strong capital and asset quality, regulatory compliance, and sound governance.Calling the approval “a validation of AU’s business model, governance, and enduring commitment to financial inclusion,” Agarwal said, “It affirms AU’s evolution into a complete bank… spanning retail, business, and digital solutions.” India has 12 public and 21 private sector banks, besides SFBs, payments banks, LABs, and cooperatives. Only universal banks are full-fledged commercial banks, permitted to offer the full range of services and large loans without geographic or customer-type restrictions. In contrast, SFBs and LABs have limited mandates.