Ujjivan Small Finance applies for universal banking license with RBI

Ujjivan Small Finance Bank (SFB) has applied to the Reserve Bank of India (RBI) for a universal banking license, aiming to expand its business mix and strengthen its loan portfolio. The bank’s board of directors approved the application, which was submitted in January.

The move aligns with Ujjivan SFB’s strategy to diversify beyond its small finance bank operations and increase the proportion of secured loans in its portfolio. Transitioning to a universal bank would also provide the lender with greater operational flexibility and access to a wider customer base.

To qualify for a universal banking license, the bank must meet several eligibility criteria, including being listed on a recognised stock exchange, maintaining a minimum net worth of ₹1,000 crore, and fulfilling minimum capital requirements. Additionally, it must have posted a net profit in the last two financial years and ensure its gross and net non-performing asset (GNPA, NNPA) ratios remain within prescribed limits.

The RBI will conduct an initial screening to verify the bank’s eligibility before forwarding the application to a five-member standing external advisory committee for further evaluation. If approved, Ujjivan SFB will join the ranks of other small finance banks that have transitioned to full-service lenders in recent years.

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