AU Small Finance Bank Limited

AU Small Finance Bank Limited is a small finance bank founded in 2017 and headquartered in Jaipur.

AU Small Finance Bank is one of only two small finance banks registered as a CGSS Member Institution. It converted from an NBFC to a small finance bank in 2017 and is headquartered in Jaipur, with its strongest presence across Rajasthan and north-western India. Small finance banks operate under a distinct RBI licence with mandated priority sector lending targets, which orients them toward smaller borrowers by regulatory design rather than by choice.

Its role in the Credit Guarantee Scheme for Startups. AU Small Finance Bank Limited is one of 40 institutions registered with the National Credit Guarantee Trustee Company as a CGSS Member Institution (NCGTC MLI ID 63, classified as a small finance bank). Member Institutions are the lenders that actually extend credit under the scheme: you borrow from AU Small Finance Bank Limited, and NCGTC guarantees AU Small Finance Bank Limited against your default. That guarantee is what allows the facility to be extended to a DPIIT-recognised startup without collateral, with cover of up to Rs 20 crore per borrower, being 85 percent of the amount in default on loans up to Rs 10 crore and 75 percent above that.

What this means in practice. For a founder that cuts both ways. A small finance bank is structurally more interested in a smaller-ticket borrower than a large commercial bank would be, so a modest CGSS facility is less likely to be dismissed as too small to bother with. But the licence class and balance sheet mean this is not a route to a facility near the scheme's Rs 20 crore ceiling. Match your ask to the institution.

The terms are the bank's, not the scheme's. This is the point founders most often miss. CGSS fixes the guarantee, not the loan. The interest rate, tenure, moratorium, repayment schedule and how the Annual Guarantee Fee is passed through to you are all set by AU Small Finance Bank Limited under its own credit policy, and they differ materially between Member Institutions for an identical borrower. Nor does registration oblige AU Small Finance Bank Limited to lend: it appraises you on its normal credit standards first and applies the guarantee second. Approaching more than one Member Institution is almost always worth the effort.