As per news reports, Ujjivan Small Finance Bank has submitted an application to the Reserve Bank of India for a universal banking license. The move is aimed at diversifying beyond small finance operations and increasing the share of secured loans.
The RBI will first conduct an initial review to assess the bank’s eligibility before referring the application to a five-member standing external advisory committee for a detailed evaluation.
As per news reports, if approved, Ujjivan SFB will become one of the small finance banks to have successfully made the shift to a full-service banking model in recent years.
To secure a universal banking license, Ujjivan SFB must fulfill various conditions, such as being listed on a recognised stock exchange, having a net worth of at least ₹1,000 crore, and meeting capital requirements.
The bank is also required to demonstrate profitability over the past two years and ensure its gross and net non-performing asset (GNPA, NNPA) ratios are within the stipulated thresholds.
In January 2025, Ujjivan Small Finance Bank reported a 64% decline in net profit, amounting to ₹103 crore for the third quarter ending December 2024, mainly due to increased provisions for bad loans.
The asset quality showed some deterioration, with gross non-performing assets (NPAs) rising to 2.68% of gross advances, up from 2.18% a year ago. The bank also saw an increase in provisions for bad loans, which rose to ₹223 crore, compared to ₹63 crore in the same quarter last year.
However, total income for the quarter rose to ₹1,763 crore, up from ₹1,655 crore a year ago.The bank’s interest income grew to ₹1,591 crore for the quarter, compared to ₹1,471 crore in the same quarter last year.
Despite the profit drop, Ujjivan Small Finance Bank plans to transition to a universal bank and has received board approval to initiate the process with the Reserve Bank of India.
Ujjivan Small Finance Bank’s share price opened at ₹37.33 in today’s trading session, slightly lower than the previous close of ₹37.34. The stock reached a high of ₹37.73 and a low of ₹37.25 during the session, reflecting a modest fluctuation in its value.
As of the latest update, the share price is down by ₹0.07, or 0.19%. This comes after the stock dropped 0.37% yesterday, snapping a five-session gaining streak.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Feb 5, 2025, 9:25 AM IST
Neha Dubey
Neha Dubey is a Content Analyst with 3 years of experience in financial journalism, having written for a leading newswire agency and multiple newspapers. At Angel One, she creates daily content on finance and the economy. Neha holds a degree in Economics and a Master’s in Journalism.
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