Ujjivan Small Finance Bank has applied to the Reserve Bank of India (RBI) for a universal banking licence as it seeks to strengthen its offerings and its position in the sector.

The Bengaluru-based lender has become the second small finance bank (SFB) to apply for a universal banking licence under the voluntary transition route.

Last year, AU Small Finance Bank submitted an application to the RBI seeking approval for a universal bank licence.

“The Bank has consistently demonstrated strong financial performance and a commitment to financial inclusion, serving a diverse customer base across the country. Securing the universal banking licence, if approved, will strengthen Ujjivan’s efforts to provide holistic financial services to its customers and empower all aspiring Indians with a wider range of banking solutions,” said Ujjivan SFB managing director and CEO Sanjeev Nautiyal.

Starting operations in February 2017, Ujjivan SFB has about 9.3 million customers through its 753 branches spread across 26 states and union territories in the country. 

As of 31 December 2024, the lender’s gross loan book stands at Rs 30,466 crore while  deposits are at Rs 34,494 crore.

 “The diversification of the loan book has seen accelerated results, with the secured segment contributing 39% to the overall loan book,” the bank said in a statement.

The RBI, in April last year, invited applications from small finance banks meeting specified criteria, including a minimum net worth of Rs 1,000 crore and a satisfactory track record of at least five years, for becoming regular or universal banks. They must also maintain a gross non-performing asset (NPA) ratio of 3% or less and a net NPA ratio of 1% or less over the past two financial years. Further, the norms allow only listed small finance banks to apply.

Bengaluru-based Jana Small Finance Bank is also looking to transition into a universal bank.