The board of directors of Ujjivan Small Finance Bank (SFB) Thursday approved to file an application with the Reserve Bank of India (RBI) for universal bank licence.

Earlier, AU SFB had applied to the RBI for a transition to a universal bank. Jana SFB is expected to also apply in the current calendar year.

The Board of Directors...has inter alia approved to make an Application to the RBI for Universal Bank License pursuant to RBI Guidelines for ‘on tap’ licensing of universal banks in the private sector dated August 1, 2016 and RBI circular on voluntary transition of small finance banks to universal banks dated April 26, 2024,” it said.

According to the RBI’s circular, in order for an SFB to transition to universal bank, they must be listed on recognised stock exchange, have a minimum net worth of Rs 1,000 crore as at the end of previous quarter, meet minimum capital requirements of SFBs and must have posted net profit in the last two financial years.

The SFBs must also have gross and net-non performing asset ratio (GNPA, NNPA) of not more than 3% and 1%, respectively, over the last two financial years.

Recently, the RBI set up a five-member committee to review applications for universal banks and SFBs, with former RBI Deputy Governor MK Jain as the head.