Meet Sanjay Agarwal: From failing in class 8 to building a Rs 49,000 crore bank

Imagine failing class 8 and giving up your dream of playing cricket, only to become a billionaire running a major bank. This isn't just about making money but about never giving up and overcoming challenges. From early struggles in school to building a successful financial company, this story shows that hard work and vision can lead to incredible success. This is the inspiring journey of Sanjay Agarwal who turned a small finance company into a Rs 49,000 crore bank, becoming one of the richest people in India.

Sanjay Agarwal, a self-made billionaire, is one of the most inspiring figures in India's business landscape. From failing in 8th class and CA exams twice to running AU Small Finance Bank, a bank with a market value of Rs 49,000 crore, his journey is nothing short of remarkable. This article lets take a look into the life and career of Sanjay Agarwal and the success of AU Small Finance Bank, highlighting his incredible transformation and achievements.

Early Struggles and Education

Sanjay Agarwal | Photo: Paul Noronha

Sanjay Agarwal's story begins with humble beginnings in Rajasthan. Born to an engineer with the Rajasthan State Electricity Board, Sanjay faced academic challenges early on. He failed to pass class 8, which forced him to shift from studying in Hindi to English in an attempt to improve his academic performance. ¡°English was my undoing. It affected my confidence and other subjects. After I changed to Hindi medium in Class 9, I gained back the mojo, becoming school captain for badminton and cricket. Games taught me fighting spirit, discipline, hard work, calmness, and respect for rules (umpires) and molded me to what I am today,¡± Sanjay told TOI. Despite these early setbacks, Sanjay Agarwal pursued his education at Government College in Ajmer, eventually aiming for a career in chartered accountancy.

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From Cricket Aspirations to Finance Professional

As a child, Sanjay Agarwal dreamed of becoming a cricketer. However, after failing class 8, he gave up his cricket aspirations to focus on academics and building a career. This decision marked a significant turning point in his life, leading him towards the path of finance and entrepreneurship.

Overcoming Failures and Mental Breakdown

Sanjay Agarwal's journey was fraught with obstacles. After joining a CA firm Anil Bafna & Co, he failed CA exams twice, leading to a severe mental breakdown. However, his determination did not waver. After successfully clearing the CA exams, Sanjay was offered a position in Mumbai. Yet, he chose to stay in Jaipur and start his own business, laying the foundation for his future success.

The Birth of AU Small Finance Bank

At the age of 25, Sanjay Agarwal managed to persuade local businessmen to invest in a finance company, despite having no capital of his own. He started by offering car loans and gradually expanded his ventures to include a granite mill and a truck company. However, in 2000, he decided to focus exclusively on finance. This decision led to significant milestones, including a partnership with HDFC in 2002 and a capital investment from Motilal Oswal in 2009.

AUbank

In 2017, after two decades of hard work, Sanjay Agarwal transformed his company into AU Small Finance Bank. Today, AU Small Finance Bank serves over 30 lakh customers through more than 1,000 locations across India. As of 2023, Sanjay Agarwal's net worth is estimated to be over Rs 10,026 crore ($1.2 billion).

AU Small Finance Bank: A Banking Revolution

AU Small Finance Bank, headquartered in Jaipur, started as AU Financiers (India) Ltd, an NBFC and car financing business in 1996. It became a fully operational small finance bank on April 19, 2017. The bank was listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) in the same year and was recognised as a Fortune India 500 company.

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The bank¡¯s IPO in 2017 was worth Rs 1,912.51 crore and was oversubscribed 53 times. By March 2018, AU Small Finance Bank had expanded to 306 branches and 292 ATMs across 11 states. As of 2024, the bank operates in 21 states with 2,383 branches, serving 1.1 crore customers.

Strategic Partnerships and Growth

According to Times Now, AU Small Finance Bank's growth was accelerated by strategic partnerships with major companies such as Suzuki, Tata Motors, and the National Housing Company. By June 2011, the bank had disbursed loans amounting to Rs 1,508 crore to over 1,25,000 customers. The Reserve Bank of India's introduction of Small Finance Banks in 2015 marked a significant turning point for AU, making it the only NBFC to secure a license.

Setting New Standards in Banking

AU Small Finance Bank has set new benchmarks in the banking industry with attractive interest rates. As of June 16, 2024, the bank offers a 7.25% interest rate on savings accounts and an 8.24% annualised interest rate on 18-month fixed deposits. Senior citizens benefit from even higher rates of 8.77%, reported in Times Now. These competitive rates have drawn numerous customers, challenging larger banks like HDFC Bank and ICICI Bank.

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Sanjay Agarwal's inspiring journey from a class 8 failure to a billionaire running AU Small Finance Bank is a testament to his resilience, determination, and visionary leadership. His story serves as an inspiration to many, proving that with hard work and perseverance, one can overcome any obstacle and achieve remarkable success.