Shares of Ujjivan Small Finance Bank Limited declined 3.25% on April 15 after the Reserve Bank of India returned the bank’s application for a universal banking licence, citing that it does not yet meet certain prescribed criteria.
The stock opened at ₹58.20 against its previous close of ₹60.30, touching a session high of ₹58.60 and a low of ₹57.51. The 52-week range stands between ₹38.91 and ₹68.00.
According to the disclosure, the RBI has returned Ujjivan Small Finance Bank’s application for conversion into a universal bank and suggested that the bank may consider reapplying once it achieves a more diversified portfolio mix. The regulator acknowledged the bank’s recent efforts towards diversifying its loan book but indicated that further progress is required before the application can be considered. Frameworks governing universal bank conversion require banks to meet rigorous benchmarks on capital adequacy, corporate governance, technology infrastructure, and asset quality.
Ujjivan Small Finance Bank had first submitted its application for conversion in February 2025, in line with RBI guidelines that allow well-performing small finance banks to transition after meeting criteria including asset size, profitability track record, and diversification of operations. The bank had been actively working to reduce its dependence on microfinance loans and expand into secured lending segments such as housing, MSME, and vehicle finance. A universal banking licence would have expanded the bank’s ability to take larger deposits and offer a broader range of corporate and retail banking operations.
With the application now effectively stalled, the bank’s medium-term growth and scale strategy is likely to face reassessment by market participants.
Ujjivan Small Finance Bank is a Bengaluru-based small finance bank serving primarily underserved and unserved segments of the population, with a product portfolio spanning microfinance, housing loans, MSME lending, deposits, and other retail banking services.
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