The Board of Directors of Ujjivan Small Finance Bank (SFB) on Thursday approved to file an application with the Reserve Bank of India (RBI) for universal bank license, the bank informed exchanges.

“The Board of Directors...has inter alia approved to make an Application to the RBI for Universal Bank License pursuant to RBI Guidelines for ‘on tap’ licensing of universal banks in the private sector dated August 1, 2016 and RBI circular on voluntary transition of small finance banks to universal banks dated April 26, 2024,” it said.

According to the RBI’s circular, in order for an SFB to transition to universal bank, they must be listed on recognised stock exchange, have a minimum net worth of ₹1,000 crore as at the end of previous quarter, meet minimum capital requirements of SFBs and must have post net profit in the last two financial years.

The SFBs must also have gross and net-non performing asset ratio (GNPA, NNPA) of not more than 3 per cent and 1 per cent, respectively, over the last two financial years.

More recently, the RBI also formed a committee to review applications for universal banks and small finance banks. The five-member committee, chaired by MK Jain, the former RBI Deputy Governor, will assess eligible applications screened by the RBI. Apart from Ujjivan SFB, AU SFB has already applied for an universal bank license with the RBI. Jana SFB too is expected to follow suit in the current calendar year.

Published on January 23, 2025