So, far only AU SFB has made the cut to transition into a universal bank
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FRANCIS MASCARENHAS
The Reserve Bank of India (RBI) has “returned” the application of Bengaluru-headquartered Ujjivan Small Finance Bank to convert into a universal bank even as it, asked the Bank to consider applying again after demonstrating a diversified loan portfolio.
This is the second SFB to have its application to transition into a Universal Bank returned. In October 2025, RBI had returned Bengaluru-headquartered Jana Small Finance Bank’s application.
Ujjivan SFB, in a regulatory filing, said the RBI took note of the Bank’s recent efforts towards diversification of its loan portfolio.
“However, they were of the view that there is scope for progress in this area. Therefore, RBI have returned the…application and advised the Bank to consider applying again after demonstrating a diversified loan portfolio,” per the filing.
The Bank, in a statement, said the application for transitioning to a Universal Bank was submitted as part of its long-term growth plans.
“Ujjivan will continue to embark on the path of diversification and will resubmit the application in due course, keeping RBI’s guidance in view,” it added.
So, far only AU SFB has made the cut to transition into a universal bank. It became the first SFB to receive an in-principle approval from the Reserve Bank of India (per notification dated August 7, 2025) to transition into a Universal Bank.
The criteria for a SFB to transition to a universal bank include scheduled status with a satisfactory track record of performance for a minimum period of five years; shares of the bank should have been listed on a recognised stock exchange;
Further, the SFB should have a minimum net worth of ₹1,000 crore as at the end of the previous quarter (audited); meet the prescribed CRAR (capital-to-risk-weighted assets ratio) requirements; and have GNPA and NNPA of less than or equal to 3 percent and 1 percent respectively in the last two financial years.
Published on April 13, 2026
