Mumbai: AU Small Finance Bank’s vehicle financing business has crossed ₹50,000 crore in Assets Under Management, marking a major milestone for the lending franchise with which the financial institution began its journey nearly three decades ago.
The milestone was achieved in August 2026, according to the bank. The Wheels business now serves more than 13.7 lakh customers across India and remains AU Small Finance Bank’s largest lending franchise, contributing nearly one-third of its overall loan portfolio.
The portfolio has recorded a three-year compound annual growth rate of 26% and a five-year CAGR of 29%, reflecting sustained expansion across different business cycles.
AU Small Finance Bank, which has also received the Reserve Bank of India’s in-principle approval to transition into a Universal Bank, said the Wheels franchise continues to form an important part of its lending strategy.
From Rajasthan to a Nationwide Vehicle Finance Business
The business traces its origins to 1996, when AU started financing self-employed entrepreneurs and transport operators in Rajasthan.
Over nearly three decades, its customer base has expanded to include transport operators, farmers, contractors, taxi owners, first-time vehicle buyers, small businesses and emerging entrepreneurs.
The underlying proposition has remained relatively straightforward: finance the vehicles that, in many cases, also happen to be the customer’s workplace, income generator or first substantial productive asset.
Pre-owned vehicle financing has emerged as a significant part of the business, alongside lending for new vehicles and two-wheelers.
AU said its experience in used-vehicle financing has helped extend formal credit to customers seeking more affordable access to mobility and income-generating assets, particularly across semi-urban and rural markets.
New Vehicle Finance Leads Portfolio
The Wheels franchise currently has an AUM of more than ₹50,000 crore, comprising ₹30,752 crore in new vehicle finance, ₹17,966 crore in pre-owned vehicle finance and ₹1,767 crore in two-wheeler finance.
The business is supported by AU Small Finance Bank’s network of more than 3,000 service touchpoints across India, with serviceability extending to nearly 2,000 locations.
The geographical reach allows the lender to cater to customers across urban, semi-urban and rural markets.
Commenting on the milestone, Sanjay Agarwal, Founder, MD & CEO, AU Small Finance Bank, said:
“Crossing ₹50,000 crore AUM in our Wheels business is a deeply meaningful milestone because it represents the foundation on which AU was built nearly three decades ago. What started with a simple belief in supporting hardworking entrepreneurs and self-employed individuals has today grown into a franchise trusted by over 13 lakh customers across India.
This milestone reflects far more than the size of a portfolio. It represents countless journeys of mobility, livelihood creation, business expansion and economic progress. We are grateful to our customers, dealer partners, employees and stakeholders who have been integral to this journey.
As India continues to invest in infrastructure, logistics, rural prosperity and entrepreneurship, we remain committed to supporting customer aspirations through responsible lending, technology-led innovation and prudent risk management. The Wheels franchise will continue to be a key growth engine in AU’s journey towards becoming a Universal Bank.”
Technology Takes a Larger Role in Lending
Alongside the expansion of its vehicle finance portfolio, AU Small Finance Bank is integrating analytics, automation and artificial intelligence-led capabilities into its lending operations.
The bank said these technologies are being deployed to improve customer experience, operating efficiency and scalability while supporting the next phase of growth in the Wheels business.
The ₹50,000 crore milestone also underlines how vehicle finance extends beyond passenger mobility in India. Commercial vehicles, taxis, agricultural vehicles and pre-owned automobiles often double as business tools, making access to credit closely linked with employment and entrepreneurship.
As AU approaches its fourth decade of operations, its oldest lending business is also likely to remain one of its most closely watched. The vehicles may have changed considerably since 1996; the role of financing them in enabling businesses and livelihoods has not.
