AU Small Finance Bank Gets Govt Approval to Raise Foreign Investment Limit to 74%

AU Small Finance Bank has received government approval to increase its foreign investment limit from 49% to 74%. The approval was given by the Department of Financial Services, under the Ministry of Finance, on December 9, 2025.

With this approval, foreign investors can now hold up to 74% stake in AU Small Finance Bank. The bank said this will help it attract more foreign investment and maintain enough room for future funding through permitted routes.

However, the approval comes with a condition. Any new foreign direct investment (FDI) will need prior approval from the Department of Financial Services, as per existing foreign investment rules. The approval will remain valid without any time limit.

The aggregate foreign investment in a private bank from all sources will be allowed up to a maximum of 74 per cent of the paid up capital of the Bank. At all times, at least 26 per cent of the paid up capital will have to be held by residents, except in regard to a wholly-owned subsidiary of a foreign bank.