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Informist, Monday, Jun. 9, 2025

 

--Jana Small Finance Bank: Applied to RBI for universal banking license

 

MUMBAI – Jana Small Finance Bank Monday said it had applied to the Reserve Bank of India for a universal banking licence. In April 2024, the RBI had laid out guidelines for voluntary transition of small finance banks to universal banks.

 

"Since receiving its SFB (small finance bank) licence in 2017, Jana has built a robust portfolio in deposits, loans, and financial services tailored to individuals, MSMEs (micro, small, and medium enterprises), and institutions," the bank said in a release. "With a growing deposit base, national presence, digital services, and a strong asset quality track record, the bank believes it is well-positioned to take the next step in its evolution."

 

Among Jana Small Finance Bank's peers, AU Small Finance Bank expects to receive a universal banking licence from the RBI this year, according to the management's remarks in a concall with analysts after the March quarter earnings. Utkarsh Small Finance Bank is also looking to get converted into a universal bank.

 

Jana Small Finance Bank's net profit for the financial year 2024-25 (Apr-Mar) shrank 25.1% on year to INR 5.01 billion. Its interest earned expanded over 17% to INR 47.10 billion. Its Basel-II capital adequacy ratio was 20.68%. According to its balance sheet at the end of March, the bank's deposits were INR 291.20 billion, while advances were INR 271.55 billion.

 

According to the RBI guidelines, a small finance bank seeking a universal banking licence should have scheduled status with a satisfactory track record for a minimum period of five years and should be listed on the stock exchanges. It should have declared a net profit in the previous two financial years and should have a capital to risk-weighted assets ratio of at least 15%. The bank should also have a minimum net worth of INR 10.00 billion at the end of the previous quarter. Jana Small Finance Bank's net worth at the end of March was INR 38.74 billion. The bank must also have gross and net non-performing asset ratios below 3% and 1%, respectively, for the preceding two financial years. 

 

"Jana SFB reaffirms its unwavering commitment to governance, compliance, customer centricity, and innovation as it embarks on this next phase," the bank said in its release.

 

Media reports had said Jana Small Finance Bank planned to apply for the licence by May, having met the requirements for transitioning to a universal bank after the March quarter results. Monday, shares of the Bengaluru-based lender ended 6.6% higher at INR 520.25 on the National Stock Exchange.  End

 

Reported by Aaryan Khanna

Edited by Rajeev Pai

 

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