AU Small Finance Bank has received approval from the Reserve Bank of India to reappoint founder Sanjay Agarwal as its Managing Director and Chief Executive Officer for a further period of three years, effective April 19, 2026.
The approval follows earlier clearances by the bank’s Board on October 17, 2025, and shareholders on December 26, 2025, subject to the RBI’s confirmation. The central bank conveyed its approval through a letter dated February 12, 2026.
This will mark Agarwal’s third consecutive RBI-approved term as MD & CEO since AU transitioned from a non-banking financial company into a bank in 2017.
From AU Financiers to a Full-Fledged Bank
Sanjay Agarwal first became the Managing Director of AU Financiers on February 14, 2008. Nearly a decade later, on April 19, 2017, AU Financiers officially became AU Small Finance Bank, and Agarwal took charge as its MD & CEO.
Under his leadership, the institution evolved from a Rajasthan-based vehicle finance company into one of India’s leading small finance banks. Notably, AU SFB also became the first small finance bank in over a decade to receive in-principle approval from the RBI to transition into a universal bank.
Who Is Sanjay Agarwal?
Sanjay Agarwal is a Chartered Accountant from the Institute of Chartered Accountants of India with a bachelor’s degree in commerce from Government College, Ajmer.
After qualifying as a CA in 1995, he began his entrepreneurial journey in Jaipur. In 1996, recognising the lack of formal financial access for people in rural and semi-urban Rajasthan, he founded AU Financiers with support from a few high net-worth individuals.
Over more than two decades, AU Financiers focused on funding income-generating assets for underserved communities a philosophy that later shaped the bank’s inclusive banking model.
Agarwal was also honoured with the Ernst & Young Entrepreneur of the Year Award in 2018 for financial services.
Strong Financial Performance in FY26
The leadership continuity comes at a time when AU Small Finance Bank has reported strong financial performance.
For the December quarter of FY26, the bank posted a 26.3% year-on-year rise in net profit to ₹667.6 crore. Net interest income (NII) also grew by 26.3% to ₹2,341.3 crore, driven by robust loan growth and stable margins.
Asset quality showed marginal improvement, with gross NPAs easing to 2.30% sequentially, while net NPAs remained stable at 0.88%.
Positive Market Sentiment and MSCI Weight Increase
Shares of AU Small Finance Bank have also witnessed positive momentum. The stock gained after it was announced that the bank would see a weight increase in the MSCI Global Standard Index due to a float adjustment.
According to Nuvama Alternative and Quantitative Research, the move is expected to bring in estimated inflows of around $172 million, or nearly 15.6 million shares.
On February 12, the bank’s shares closed 0.91% higher at ₹999.30 on the NSE, reflecting investor confidence.
RBI’s Continued Confidence in Leadership
Since the bank’s conversion in 2017, each of Agarwal’s terms has received RBI approval. The latest nod underscores regulatory confidence in his leadership, the bank’s governance standards, and long-term strategic stability as AU SFB prepares for its next phase of growth.
Sofia Babu Chacko is a journalist with over five years of experience covering Indian politics, crime, human rights, gender issues, and stories about marginalized communities. She believes that every voice matters, and journalism has a vital role to play in amplifying those voices. Sofia is committed to creating impact and shedding light on stories that truly matter. Beyond her work in the newsroom, she is also a music enthusiast who enjoys singing.
