India's Ujjivan Small Finance Bank Ltd said on Monday the country's central bank has turned down its recent application for universal bank status, citing the need for greater diversification of its loan book.
The Reserve Bank of India "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," the lender said in a stock exchange disclosure.
The regulator has advised the bank to reapply after demonstrating a more diversified portfolio, Ujjivan SFB said.
"Ujjivan will continue to embark on the path of diversification and will resubmit the application in due course, keeping RBI’s guidance in view," the lender said in a separate statement.
A transition from small finance bank to universal bank would allow such lenders to offer a wider range of services and expand beyond their original mandate of serving underserved segments.
Ujjivan SFB had first applied for the transition in February last year.
The central bank's criteria for transition include a five-year track record of satisfactory performance, a net worth of 10 billion rupees ($107 million), diversified lending, meeting capital requirements, recent profitability and limited non-performing assets.
Ujjivan SFB's loan book as on December 2025 stood at 370.5 billion rupees with deposits worth 422.2 billion rupees, according to its latest investor presentation.
Its rival AU Small Finance Bank got the banking regulator's 'in-principle' approval to transition into a universal bank in August, making it the first full-fledged banking licence issued in nearly a decade.
