AU Small Finance Bank unveils Sustainable Finance Framework, Secures Moody’s Second Party Opinion

Enabling sustainable financing while advancing AU’s commitment to responsible, inclusive, and sustainable growth.

Mumbai, September07, 2026: AU Small Finance Bank (AU SFB), India’s largest Small Finance Bank and the first in over a decade to receive in-principle approval from the Reserve Bank of India (RBI) to transition into a Universal Bank, today announced the launch of its Sustainable Finance Framework (SFF), reinforcing the Bank’s commitment to financing positive environmental and social outcomes through responsible and inclusive banking.

As an early milestone in this journey, AU SFB introduced its Planet First Green Fixed Deposit programme, enabling customers to contribute towards environmentally beneficial projects and support India’s transition to a low-carbon economy. As on June 2026, the programme has mobilised over₹3,050+ croretowards green financing, with allocations of 85% to Renewable Energy, 10% to Clean Transportation, and 5% to Green Buildings, generating measurable environmental and social impact.

Building on this foundation, AU SFB has launched its Sustainable Finance Framework, creating a structured approach to support future sustainable financing opportunities. The Framework has been independently validated through a Moody’s Second Party Opinion (SPO).

The Framework establishes clear governance processes, eligibility criteria, management of proceeds, and reporting mechanisms for mobilising and deploying capital towards eligible green and social projects. It further integrates sustainability considerations into the Bank’s long-term business and growth strategy.

Further reinforcing the Framework’s credibility, Moody’s Ratings has assigned it an SQS2 (Very Good) Sustainability Quality Score, recognising its strong alignment with internationally accepted sustainable finance principles and its meaningful contribution towards sustainability objectives.

The Framework aligns AU SFB with global sustainable finance standards and market best practices, enhances transparency and disclosure practices, strengthens investor confidence, and supports readiness for evolving ESG and climate-related regulatory expectations.

Moody’s Recognises Framework Quality and Sustainability Impact
As part of its independent assessment, Moody’s evaluated the Framework across the following pillars:
• Use of Proceeds
• Project Evaluation and Selection
• Management of Proceeds
• Reporting

Sanjay Agarwal, Founder, MD & CEO, AU Small Finance Bank, said:”Over the last three decades, our journey has been built on empowering underserved communities, supporting entrepreneurship, and creating long-term value for all stakeholders. As we prepare for our next phase of growth towards becoming a Universal Bank, sustainability is increasingly embedded into how we deploy capital, manage risks, and create impact.

The launch of our Sustainable Finance Framework marks a significant milestone in institutionalizing our commitment to responsible finance. The Framework provides a robust and transparent structure to mobilize capital towards sectors that are critical for India’s sustainable development agenda, including renewable energy, climate resilience, financial inclusion, affordable housing, MSME growth, and sustainable livelihoods.”

Supporting India’s Sustainable Growth Agenda
Through the Sustainable Finance Framework, AU SFB can mobilise and deploy capital across a broad range of eligible green and social sectors, including renewable energy, clean transportation, green buildings, financial inclusion, affordable housing, MSME development, healthcare, education, and livelihood generation. The Framework is designed to deliver measurable environmental and social outcomes while contributing to India’s sustainable development priorities and inclusive growth objectives.