Ujjivan Small Finance Bank Shares Gain as Universal Bank Licence Decision Nears

Ujjivan Small Finance Bank expects the Reserve Bank of India (RBI) to take a call on the matter by December, according to managing director and CEO Sanjeev Nautiyal, who spoke to Mint.

Transition from Small Finance to Universal Bank

Ujjivan SFB was among the 10 institutions granted small finance bank licences in 2016, alongside Equitas SFB and AU SFB, with the mandate of advancing financial inclusion through rural branches and small ticket lending. In contrast, universal banks enjoy a wider scope of operations offering services such as large corporate loans, investment banking, and insurance.

Nautiyal said it was the bank’s internal assessment that a decision could come by December, though the timeline rests entirely with the regulator.

Industry Context

In August, AU Small Finance Bank became the first lender in a decade to secure the RBI’s in-principle nod to transition to a universal bank.

To be eligible for the shift, the RBI requires listed small finance banks to:

• Maintain a minimum net worth of ₹1,000 crore
• Demonstrate a profitable track record for two consecutive years
• Have completed five years of operations

Ujjivan, headquartered in Bengaluru, applied for its universal licence in February this year and is now awaiting the regulator’s decision.

Potential Benefits for Ujjivan Small Finance Bank

If approved, Ujjivan expects to gain from:

• Relaxed regulatory requirements.
• Access to a wider business canvas, including new banking and financial services.
• Improved competitiveness against established universal banks.

Ujjivan Small Finance Bank Share Price Performance

Ujjivan SFB’s stock traded at ₹48.12, up 1.37% at 2:50 PM on the NSE from the previous close of ₹47.47. The scrip touched an intraday high of ₹48.77, with a VWAP of ₹48.23.

Read More: RBI Levies ₹44.7 Lakh Penalty on Bandhan Bank Over Compliance Issues.

Conclusion

Ujjivan Small Finance Bank’s shares are seeing positive momentum as investors eye the RBI’s upcoming decision on its universal banking licence. A positive outcome could provide the lender with expanded growth opportunities and align it more closely with India’s larger banking peers.

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