AU Small Finance Bank has made a significant move in the digital banking space with the launch of its new AU KOSMO Credit Card. This innovative product, developed in partnership with Kiwi, a Credit on UPI platform, brings the convenience of UPI payments to credit card users.

Key Features of AU KOSMO Credit Card

The AU KOSMO Credit Card, built on the RuPay network, offers a unique proposition to customers:

• UPI Integration: Users can make credit payments via UPI at both online and offline merchants without the need for a physical card.
• Rewards on UPI Payments: The card offers rewards for transactions made through UPI, encouraging digital payments.
• Fuel Surcharge Waiver: Cardholders enjoy a 1% fuel surcharge waiver, providing savings on fuel purchases.
• No Annual or Renewal Fees: The card comes with no annual or renewal fees, making it an attractive option for cost-conscious consumers.

Target Audience and Onboarding

AU Small Finance Bank is positioning the AU KOSMO Credit Card to appeal to:

• First-time credit users
• Young professionals
• Tech-savvy consumers

The bank has implemented a digital onboarding process, aligning with the preferences of its target demographic and streamlining the user experience.

Market Context

The launch of the AU KOSMO Credit Card comes at a time of significant growth in the UPI and RuPay ecosystems:

• UPI P2M (Person to Merchant) payments reached ₹7.20 lakh crore in August, marking a 26% year-over-year increase.
• RuPay's credit card market share has grown to nearly 12%, indicating increasing adoption of the domestic payment network.

AU Small Finance Bank's Market Position

As of June 30, AU Small Finance Bank's financial position and reach include:

• Over 2,500 banking touchpoints across 21 states and four union territories
• Total deposits of ₹1.27 lakh crore
• Loan portfolio of ₹1.17 lakh crore

Strategic Implications

The introduction of the AU KOSMO Credit Card aligns with AU Small Finance Bank's broader strategy of financial inclusion. By combining credit card functionality with the widely-used UPI platform, the bank aims to expand its services across urban, semi-urban, and rural markets.

This move could potentially increase the bank's customer base, particularly among younger and more tech-savvy demographics, while also contributing to the growth of digital payments in India. The absence of physical cards may also lead to reduced operational costs for the bank in terms of card production and distribution.

As the digital payments landscape in India continues to evolve, products like the AU KOSMO Credit Card represent an important convergence of traditional credit services with modern payment technologies, potentially setting a trend for other banks to follow.

AU Small Finance Bank (AUSFB) has made headlines with a significant block trade and an announcement of employee stock option allotments. The bank, known for its focus on small finance, has demonstrated active market engagement and continued commitment to employee incentives.

Block Trade Details

AU Small Finance Bank executed a substantial block trade on the National Stock Exchange (NSE). The transaction involved approximately 941,745 shares changing hands at a price of Rs. 704.00 per share. This block deal amounted to a total value of Rs. 66.30 crores, indicating significant investor interest in the bank's stock.

Employee Stock Option Allotment

In a separate development, AUSFB has disclosed the allotment of equity shares under its Employee Stock Option Plans (ESOPs). According to the bank's filing:

• A total of 212,992 equity shares with a face value of Rs. 10 each were allotted.
• These allotments were made under various ESOP schemes:
  • ESOP 2016: 8,016 shares
  • ESOP 2018: 124,486 shares
  • ESOP 2020: 60,769 shares
  • ESOP 2023: 19,721 shares

Impact on Share Capital

Following this allotment, AU Small Finance Bank's paid-up equity share capital will increase from Rs. 745,89,82,300 to Rs. 746,11,12,220. This represents a marginal increase in the bank's equity base.

Market Implications

The execution of the block trade worth Rs. 66.30 crores suggests continued investor confidence in AU Small Finance Bank. Meanwhile, the allotment of shares under ESOPs underscores the bank's strategy to align employee interests with those of the company and its shareholders.

These developments come at a time when the banking sector, particularly small finance banks, are under close watch by investors due to their potential for growth in underserved markets.

AU Small Finance Bank continues to demonstrate its commitment to transparency by promptly disclosing these transactions and share allotments, in compliance with SEBI regulations.