In an exchange filing, the bank said the RBI, in its communication dated April 13, acknowledged its recent efforts towards diversifying the loan portfolio but noted that there remains scope for further progress. The regulator has advised the bank to reapply after demonstrating a more diversified loan book.
This marks the second instance in recent months where the RBI has returned a small finance bank’s application for a universal banking licence. Earlier, the central bank had returned Jana Small Finance Bank’s application citing non-fulfilment of eligibility criteria, while granting in-principle approval to AU Small Finance Bank for conversion into a universal bank.
Ujjivan Small Finance Bank had applied for the licence in February 2025, after receiving in-principle approval from the RBI in August 2025 under the on-tap licensing framework. The transition to a universal bank is aimed at expanding its business mix and strengthening its loan portfolio.
To qualify, lenders must meet several criteria, including a minimum net worth of ₹1,000 crore, consistent profitability, and adherence to asset quality norms.
On the financial front, the bank reported a strong December quarter performance, with net profit rising 71% year-on-year to ₹186 crore. Net interest income grew 12.8% to ₹1,001 crore, while asset quality improved sequentially, with gross NPAs declining to 2.38% and net NPAs to 0.57%.
The bank has also indicated that credit costs are likely to trend lower as its secured loan book expands, with margins expected to stabilise over the medium term.
