Ujjivan Small Finance Bank (SFB) has applied for a universal banking licence from the Reserve Bank of India (RBI) to expand its banking services and strengthen its position in the financial sector.
The Bengaluru-based lender is the second small finance bank (SFB) after AU Small Finance Bank to seek a universal banking licence under the voluntary transition route. If approved, this move will allow Ujjivan SFB to offer a broader range of financial services beyond its current offerings.
Commitment to Financial Inclusion
Sanjeev Nautiyal, Managing Director and CEO of Ujjivan SFB, expressed confidence in the bank’s strong financial performance and commitment to financial inclusion. “Securing the universal banking licence, if approved, will strengthen Ujjivan’s efforts to provide holistic financial services to its customers and empower all aspiring Indians with a wider range of banking solutions,” Nautiyal said.
Since its inception in February 2017, Ujjivan SFB has grown its presence across India, serving approximately 9.3 million customers through 753 branches in 26 states and union territories. As of December 31, 2024, the bank’s gross loan book stood at ₹30,466 crore, while its total deposits reached ₹34,494 crore. The secured loan segment now contributes 39% to the overall loan portfolio, reflecting a strategic shift towards a diversified lending approach.
RBI’s Criteria for Universal Bank Conversion
The RBI has laid out strict eligibility criteria for SFBs wishing to transition into universal banks. These include:
- A minimum net worth of ₹1,000 crore
- Scheduled bank status
- A track record of at least five years
- A gross non-performing asset (NPA) ratio of 3% or lower and a net NPA ratio of 1% or lower in the past two financial years
- A requirement for the bank to be publicly listed
- Consistent net profit in the last two years
- Adherence to prescribed capital adequacy norms
The RBI also prioritizes banks with a well-diversified loan portfolio and requires a detailed justification for the transition request.
Jana SFB Also Eyes Universal Bank Status
Meanwhile, another Bengaluru-based lender, Jana Small Finance Bank, is also preparing to transition into a universal bank. The bank has been making additional or accelerated provisions to ensure its gross and net NPA ratios remain within regulatory limits of 3% and 1%, respectively.
If approved, both Ujjivan SFB and Jana SFB could join AU Small Finance Bank in successfully making the transition, further strengthening their market presence and expanding their banking services.
