Shivalik Small Finance Bank has secured a significant investment from SMBC Asia Rising Fund, a venture co-founded by Japan's Sumitomo Mitsui Banking Corporation. The fund has acquired a 4.99% stake in the bank for $7 million, valuing the institution at approximately ₹1,200.00 crore.

Investment Details

The investment from SMBC Asia Rising Fund is part of a larger equity raise totaling ₹100.00 crore. Existing investors, including Accel, Quona, Lightspeed, and Sorin Investments, have contributed an additional ₹40.00 crore to this funding round.

About Shivalik Small Finance Bank

Shivalik Small Finance Bank, which transformed from a cooperative bank to a small finance bank in 2021, has been making significant strides in the Indian banking sector. The bank currently serves over 900,000 customers across 79 branches in 11 states.

Financial Performance

Shivalik has reported impressive financial figures:

Planned Utilization of Funds

The newly acquired funds will be strategically used to:

1. Strengthen technology infrastructure
2. Expand workforce in key areas:
   • Product development
   • Engineering
   • Operations

Impact on Capital Adequacy

The capital infusion is expected to have a significant impact on the bank's financial health:

This improved capital position will support Shivalik's ambitious growth targets of 35-40% in business expansion.

Strategic Implications

This investment marks a notable development in the small finance banking sector in India. The involvement of SMBC Asia Rising Fund, backed by a major Japanese banking corporation, signals growing international interest in India's evolving financial landscape.

For Shivalik Small Finance Bank, this investment not only provides necessary capital for growth but also brings in strategic partnerships that could prove valuable for its future expansion and technological advancement.

As the bank continues to focus on secured lending and expands its customer base, the additional capital and expertise from both international and domestic investors could potentially accelerate its growth trajectory in the competitive small finance banking sector.

AU Small Finance Bank (AU SFB) has achieved a significant milestone in its journey, receiving in-principle approval from the Reserve Bank of India (RBI) to transition into a universal bank. This development marks a historic moment as AU SFB becomes the first small finance bank in India to receive such approval.

RBI's Approval and Transition Timeline

The RBI has granted AU Small Finance Bank an 18-month window to complete its transition into a universal bank. This decision follows the central bank's guidelines that provided clarity on the process for small finance banks to evolve into universal banks.

Key Condition for Transition

As part of the transition process, the RBI has mandated a crucial condition: the 21.4% stake held by Managing Director Sanjay Agarwal, his family, and other promoters must be transferred to a non-financial holding company.

AU SFB's Journey

AU Small Finance Bank's evolution has been remarkable:

• Founded in 1996 by Sanjay Agarwal
• Transitioned from a non-banking finance company to a small finance bank
• Now poised to become a universal bank

Financial Position

AU Small Finance Bank reported:

Management's Perspective

Sanjay Agarwal, Founder, MD & CEO of AU Small Finance Bank, expressed his enthusiasm: "We have made history by receiving in-principle approval from the Reserve Bank of India to transition into a Universal Bank. This milestone is a reaffirmation of our purpose, perseverance, and passion. AU is not just a bank - AU is a mission."

Impact and Future Outlook

The transition to a universal bank is expected to:

• Strengthen AU SFB's brand acceptance
• Broaden access to diversified deposit sources
• Potentially reduce the cost of funds over the medium to long term

AU Small Finance Bank's journey from a small finance bank to a universal bank underscores its growth trajectory and commitment to financial inclusion. As the bank prepares for this significant transition, it aims to offer a full spectrum of banking products and services, catering to retail, business, and digital solutions.

The successful completion of this transition will mark a new chapter in India's banking sector, showcasing the potential for growth and evolution within the financial industry.