Sustainability Initiatives & Financial Inclusion

Staying true to
our commitments

AU Small Finance Bank, with its 25 years of experience and a mission to give wings to the aspirations of millions through its financial services in the unserved and underserved market, has successfully built a business model to gain the trust of its stakeholders. The business model of the Bank is aligned to generate sustainable value for its customers, clients, shareholders and employees.

The Bank has taken several steps to unredeem the shadow of financial duress of underprivileged people, by galvanising its financial inclusion and financial literacy efforts. The Bank has developed customised products and services to cater to the needs of all the sections of the society, without any discrimination.

Our prudent strategies on economic and social upliftment, along with leaving a positive impact on the environment, have always been the bedrock of our inclusive growth.

The Bank’s business responsibility of conducting ethical business is deep rooted in our DNA and in our people. We have structured and inculcated our AU Dharmas in the entire ecosystem of our Bank, thereby laying a strong foundation for business ethics.

Through CSR initiatives, the Bank has made a creditable endeavour for social development, building a better society by ensuring livelihood options, empowering women, skills enhancement, financial literacy & education and sports development.

Environment protection is the need of the hour and AU, as a responsible organisation, always strives to run its business in an eco-friendly manner, with the adoption of various measures to reduce emission of green-house gases.

Our seamless, advanced, integrated technology framework enables the users to bank digitally, thereby enhancing customer delight and saving the cost and time of our customers.

The reporting framework used in this report is based on the 9 Principles of ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs)’ released by the Ministry of Corporate Affairs, Government of India, in July 2011, the disclosures made under this report provide transparent and relevant information on the Bank’s efforts and performance against the principles of Business Responsibility as stipulated in Regulation 34(2)(f) of The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, covering topics across environment, social, governance, and stakeholder perspective. It is intended to transparently disclose our performance based on the principles provided in the NVGs and is meant for all our stakeholders.

Social impact

Corporate Social Responsibility Initiatives


Over the years, AU Bank has gained prominence as a trusted and responsible banking institution. However, our responsibilities extend much beyond banking. AU Foundation, under the umbrella of AU Bank, is moving relentlessly in the pursuit of social development and upliftment.

‘The future of business as well as societal progress are intertwined, and one cannot succeed at the cost of the other’.

AU Foundation, with its firm conviction of sustainable development, focused on building a platform for underprivileged and unserved people to fulfil their aspirations through its CSR initiatives. It seeks to improve the life and livelihood of people and bring out visible transformation.

We have developed several community upliftment programmes and livelihood projects with requisite intervention, after understanding the requirements, aspirations and expectations of the communities.

Our penetration areas are broadly classified under:

  • AU Udyogini – Empowering Women Entrepreneurship
  • AU Skills Academy – Empowering Self-Reliance
  • Sports for Development – Making a Healthier India
  • Financial and Digital Literacy Initiative – Empowering with Financial Knowledge and Wisdom

Livelihood enhancement

Our core business philosophy has always been to serve the underserved. Our livelihood enhancement programmes take this tenet of AU Bank’s purpose ahead and guide community members to create a better life for themselves. We run two different programmes — AU Skills Academy and AU Udyogini — to deliver growth opportunities to rural, semi-urban and urban areas focussed on the marginalised communities.


Youths trained in AU Skills Academy

AU Skills Academy

Skilled human resource is the asset of a nation.

At AU Skills Academy, we offer vocational skilling programmes to the youth from needy backgrounds.

Through these programmes, AU Skills Academy follows a holistic approach and emphasises on polishing soft skills covering communication, presentation, leadership, teamwork, language proficiency and personality development.

The programme trains aspiring youths to be ready for work in the daunting environment of different industries in diversified roles including Customer Relationship Management (CRM), Office Assistant, Retail Sales Associate, Food & Beverages and in the Hospitality & Tourism sector. During the year, we have trained 638 youngsters, and most of them are suitably placed. We further incorporated the following action points for strengthening these initiatives:

  • Launched the alumni club to create a network of ex-trainees with placements
  • Felicitated outstanding trainees
  • Standardised mobilisation process to reduce human bias and intervention

AU Udyogini

AU Udyogini, a livelihood and women empowerment initiative of AU Foundation, operates with the objective of transforming and empowering rural women into village-level entrepreneurs with a sustainable business model. The programme trains groups of rural and semi-urban women with income/employment generation skills, including multiple soft skills and business skills, along with backward and forward market linkages, procurement of raw materials and selling of the finished product.

During FY 2019-20, we supported three projects under this initiative and empowered 330+ women.


Total Women trained under AU Udyogini


“Becoming a bread earner for my family, was never a choice, but a compelling circumstance,” – says Champa Devi a woman in her mid-forties, living in the hinterland of Jobner, a suburban area of Jaipur city.

Champa Devi, began earning a living when her husband was diagnosed with a fatal disease.

She started working as a wage labourer in agriculture fields in the vicinity. Survival with this meagre income from labour work was difficult as she was unable to satisfy the needs of her family.

She was always on the lookout for multiple sources of livelihood to build a better future for her family. Her eyes lit up with aspirations when she heard about the AU Udyogini programme. She joined the programme and has since, shown zeal in becoming a part of the Food Processing and Masala Making unit, besides learning the art of selling her products at better prices.

AU Udyogini helped her to recognise her true abilities and sharpen her skills to fly high.

Within a short span of time, she moved up the ladder and became a team leader of the group, scaling new heights every day. She has also learnt leadership skills and motivates other women around her to join her team.

Today, Champa Devi is the co-owner of her masala brand, Maa Annapurna Masala with a motto of selling the purest and finest spice mixes, without compromising on quality.

In her words, “Customer health is our utmost priority and hence we only sell quality products. The trust of customers always comes with the time and efforts we put in, to serve them with the highest quality products. Money will come eventually.”

She is now an inspiration to several other women in her community.

Financial and digital literacy

As a Small Finance Bank (SFB), our objective has always been to build a strong banking and financial ecosystem that caters to the unbanked and unserved, with easy access to credit and banking services. Over the years, we have served the needs of the underbanked and marginalised segments of the society — small and marginal farmers, micro and small industries, and the unorganised sector.

These associations pointed out the lack of financial literacy among certain strata of the society, which hinders the adoption of formal financial services. Remedying the situation, the Bank conducted programmes for imparting financial literacy and education as a mode of creating awareness about banking products, government schemes, insurance and pensions etc.

We follow a unique creative model of Nukkad Natak (Street Play) to reach out to our target audience, primarily to farmers, workers, school/college students, women, Self-Help Groups (SHGs) both in urban and rural populations. With our expertise, we have made the sessions more interesting by adding animated videos for delivering the right messages in their local dialects.

During the year, we conducted 1,767 financial and digital literacy camps in more than 82 districts of 6 states (Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, Haryana and Punjab), reaching out to nearly 3 lakh people.

3 lakh

people reach through various financial and digital literacy programmes

Sports for development

Sports is associated with improvements in health, cognitive processes, sociability, productivity and quality of human life. Sports are crucial in the overall development of children as it helps in learning life lessons on discipline, team handling, and co-ordination, inculcating team-spiritedness, besides building strategies and developing leadership qualities among others.

At AU Foundation, we initiate multi-faceted sports intervention programmes that encourage youngsters to take up sports and coach them for state and national level participation.

We promote team sports like football and basketball through our 19 sports development centres at five different districts. These centres help the athletes to learn skills and discipline, increase endurance and agility, and build general awareness about current affairs and sports. Our sports programme, ‘Khel- Khel Mein’ benefited over 3,300 children during FY 2019-20.

‘‘A community that plays together, stays together because it knows ways to win any challenge that life throws at them.’’

Financial Inclusion

Global Findex database of the World Bank 2017, reported that globally 1.7 billion adults lack an account, and approximately 31% people do not have a bank account and are totally excluded from mainstream financial services and products. Access to affordable financial services is an ultimate tool for overcoming poverty and minimising income inequalities, and hence the role of financial inclusion becomes significant.

Relatively speaking, India has been one of the bright spots in an otherwise lacklustre global economy. As we move ahead, the near-term growth outlook especially for discretionary spends is sluggish. However, India’s favourable demographics, continuing policy reforms, significantly better Current Account Deficit (position 0.2% of GDP for Q3 FY20), and improved banking and corporate balance sheets augur well for its medium - to long-term growth prospects.

At AU Bank, we are committed in bringing more and more unbanked and underbanked people under the ambit of formal banking channels by addressing and offering adequate and timely solutions to break the shackles of exclusion.

Our market insights and greater penetration in rural and semi-urban areas enable us to build the right platform for financial inclusion. Over the years, our approach of personalised touch, assessing customers more on their behaviour and offering them customised lending products to suit their needs, have enabled us to reach out to over one and a half million people to fulfil their dreams.

The RBI has formulated the National Strategy of Financial Inclusion, defining its objectives with the vision of ensuring access to an array of basic formal financial services to all the sections of society. AU Bank has designed its programme structure revolving around these key objectives.


AU Bank Financial Inclusion (FI) objectives and achievements

KEY HIGHLIGHTS, FY 2019-20proof

` 2,857 crore

MUDRA# disbursements


BSBD^ Accounts, Cumulative numbers as on 31st March 2020.

~` 19 crore

Disbursed Under PMEGP*

~` 4,098 crore

Deposits collected in semi-urban, rural and UBR

#Micro Units Development & Refinance Agency Ltd. | ^Basic Savings Bank Deposit Accounts| *Pradhan Mantri Employment Generation Programme

Where everyone banks

Inclusive banking remains a challenge in India. Our financial inclusion programmes focus on increasing access of formal banking services to benefit small and marginal farmers, economically weaker sections, micro, small & medium sized enterprises & business owners.


of retail asset customers are self employed


of liability customers are self employed

Priority sector lending

As per RBI, the sectors which are important for our country’s development - agriculture, Micro Small & Medium Enterprises, education, housing, exports, social infrastructure, renewable energy etc. - come under the ambit of priority sector lending.

As a Small Finance Bank, we continue to abide and focus on extending credit to these priority sectors.

We at AU, always choose to serve the unserved and underserved sections of the society, with no formal document for income proof and no document to prove the intention of borrower for graduating to the next level.

“We came into existence to serve the unserved & underserved. Lending to the priority sector is embedded in our design.”

Our target customers include low and middle-income individuals and credit-worthy micro/small enterprises that possess business potential, but are unable to avail financing from formal channels viz. drivers, small transport operators, kirana and general stores, carpenters, textiles, hardware and electrical shops, furniture works, fabrication units, flour mills, educational institutes, healthcare institutions, and various other small manufacturers and traders.


Priority Sector Lending under Agriculture & Agri-Allied activities

` 64 crore

Disbursed under CGTMSE# Scheme

` 23 crore

Transferred under PMAY-CLSS^

#Credit Guarantee for Micro & Small Enterprises ^Pradhan Mantri Aawas Yojna – Credit Linked Subsidy Scheme

Covering across geographies

We serve in geographies across the spectrum - from Tier-I to Tier-VI centers, in metropolitan, urban, semi-urban and rural/unbanked rural (UBR) areas, through our 528 Bank branches, of which 164 are in UBR regions.

Region-wise Branch Distribution (%)


Financial literacy and education

Financial inclusion and financial literacy are two important elements in the developmental role of the Bank in banking the unbanked. In order to spread financial literacy and education, the RBI has developed and shared awareness content on financial products and services, good financial practices, going digital and consumer protection with different stakeholders. RBI encourages digital financial literacy initiatives in rural areas.

During the year, we conducted several financial literacy and education camps, and created awareness on various banking habits like the importance of saving, introduction of various deposit products, importance of KYC, Social Security Schemes, insurance and consumer protection while going digital.

Driving financial inclusion through technology

Our TAB-based banking, ‘paperless onboarding’ of customers, eKYC with support of AePS (Aadhar Enabled Payment System) technology are redefining customer experience.

‘‘Our digital interventions with a re-engineered approach, testify the intent to simplify banking, by eliminating unnecessary steps and enabling smooth onboarding of the customer’s journey.’’

Our doorstep banking, tab banking, AU Abhi, WhatsApp Savings Account, Chatbot, Tax Payment from Branches, Missed Call Banking, Internet Banking and Mobile Banking — all come together to enhance one’s visualisation of how technology is transforming banking and augmenting customer ease.


We have established a robust network of Banking Outlets in the unbanked rural areas and Business Correspondents to extend banking services to the remotest areas. These, technology-enabled outlets provide all basic banking services remotely with a handheld device (TAB), such as opening of accounts through eKYC, facility of cash deposit, withdrawal and remittances, insurances and pension.

The AePS enabled devices allow customers to carry out interoperable financial transactions using the Aadhar with customer’s biometric authentication.


` 2,723.46 crore

Disbursed under Agri Portfolio in FY 2019-20

Nearly 70% of the rural population in India is dependent on agriculture and its allied activities as a source of livelihood. These people suffer from a great deal of indebtedness and are subject to exploitation in the credit market, due to high interest rates and lack of convenience of credits.

To avoid these debt traps of unorganised credit lending to the agriculture sector, AU Bank has developed a conduit of products that meet the credit needs of agriculture and its allied activities.

The Bank, besides not limiting its services in extending credit for farm-based activities, has also achieved discernible progress in developing the product to satiate the credit need of the entire agri value chain.

We categorised our products under Agriculture Funding into three major pillars:

  • Farm Based Activities (Land Based Activities & Agri-Allied Activities)
  • Agriculture Infrastructures
  • Ancillary Activities/Agri Enterprises

In Farm based activities, we have unrestrained funding for purchase of Agri-Equipment like tractors and to Agri Allied activities like dairy, bee keeping, poultry, fisheries, etc. In FY 2019-20, we have funded ` 769.93 crore under Farm Based Activities, reaching out to 19,827 beneficiaries.

Majority of the farmers engaged in agricultural activities in India, are small and marginal, considered most vulnerable in terms of accessing the formal financial system to meet their funding needs. The upliftment of the sector is possible by injecting adequate amount of credit to support these small and marginal farmers. In FY 2019-20, we have funded ` 1,270.21 crore to small and marginal farmers.

The Bank intends to build a conducive environment for funding to the agricultural sector and its allied activities. Hence the Bank has adopted a prudent strategy in extending credit facility for setting up of Agri-Infrastructure to support a strong network of forward linkages of farm produce. We endeavour to provide both term as well as overdraft facility by funding for Agri-Infra creation like the construction of warehouses, godowns, cold storages, market yards, etc. for storing agricultural produce.

The Food and Agro Processing sector is one of the most critical links in the entire Agri value chain. Agri Ancillary activities include loans to high-tech horticulture projects, food and agro processing units, etc. To fulfill the credit appetite of the Food and Agro Processing sector, the Bank offers wide range of working capital products. We have extended our support by funding 1,723 cases, with ` 178.91 crore in Agri Ancillary activities.

The Bank has also funded in other Agriculture activities with disbursement of ` 485.64 crore in FY 2019-20.

We are thrilled to be seamlessly fulfilling the credit needs of several such farmers, and be a part of their success stories.

Environmental Impact

As a financial services provider operating in a developing economy, we are keenly aware of the seriousness and urgency of climate change. In response, we have incorporated environmentally oriented measures into a range of bank operations, lending, products, and services to enable the transition toward a low carbon measure. We have policies and processes in place for reducing energy usage and minimising our environmental footprint. Our efforts also focus on reducing waste, harnessing renewable energy through installed solar panel in the office premises, reducing electricity consumption, savings in paper usage.

Reducing our carbon footprint

Conservation of Energy

AU Bank endeavours to improve energy efficiency and systematically manage energy use throughout its operations. Some of the key initiatives undertaken to drive energy efficiency are:

  • Installing a BTU Meter in the chilled water system for air conditioning at our Head Office to reduce the consumption of energy
  • Designing and planning the ecosystem to maximise the use of day-light in office premises and use of energy efficient LED Lights in our offices & Branches
  • Installing Energy Star appliances to meet the Environmental Safeguard Agency’s (ESA) Power Star advisory for minimal electricity usage
  • Optimising the use of energy by installing a solar panel at our head office for reduction in carbon footprint
  • Planting more than 1,000 trees in FY 2019-20 to neutralise impact of the carbon footprint

Advanced Setting Power Use Interface

The Bank implemented the latest Operating Systems and is working on setting up of the Advanced Settings Power Use Interface (ACPI) enabled devices. During FY 2019-20, we have saved nearly 59,20,000 kWh electricity using 13,200 ACPI enabled devices.

Reduction in Consumption of Fuel

  • The Bank understands the criticality of environmental challenges and the benefits of transitioning towards a low carbon economy. We have setup lithium ion batteries/ invertors in our branches in place of DG sets, saving the use of diesel and reducing emission of CO2 in the environment.
  • We have encouraged our customer to use our digital channel of banking like net banking, mobile banking, UPI etc. for financial and non-financial transactions to promote ease of banking, save consumption of fuel as well as reduce travel time and expenses of customers

Virtualised Info Centre

Server virtualisation allows the business to migrate data from physical servers to software based virtual machines, which can hold data equivalent to that held on many physical servers. This remains the most effective way for the Bank to reduce energy consumption while boosting system efficiency and agility. We have saved nearly 82,05,000 kWh of energy by virtualising the 1,094 servers in FY 2019-20.

Energy Management

Electrical and electronic equipment contain different hazardous materials, harmful to human health and environment, if not disposed carefully. The e-waste generated, is disposed through authorised recyclers. A total of 2.95 tonnes of e-waste was disposed in FY 2019-20.

Our approach of reusing electronic devices like laptops/desktops is also an important focus area in energy management.

Technology Absorption

The Bank witnessed a strong growth in adoption of TAB-based account opening, android-based mobile banking, and internet banking, thus minimising paper usage, reducing waste generation and achieving improved waste management. In FY 2019-20, we have opened 3,46,818 accounts digitally, and saved the usage of tonnes of paper.

The Bank’s initiative in paperless banking for processing the loan applications of Two-Wheeler and Consumer Durables loans as well as the ‘No deposit slip’ policy, have significantly reduced the use of paper.

(Regulatory Disclosures as per SEBI Circular No. CIR/CFO/CMD/10/2015 in respect of Business Responsibility Report is annexed as Annexure VII to the Board’s Report)