Ujjivan Small Finance Bank Shares Drop Over 5% After RBI Returns Universal Banking Licence Application

Shares of

all Finance Bank (Ujjivan SFB) tumbled as much as 5.5% on Tuesday following the Reserve Bank of India's (RBI) decision to return the lender's application for conversion into a universal bank, citing the need for greater diversification in its loan portfolio. The Bengaluru-headquartered small finance bank informed stock exchanges late on Monday, April 13, that the RBI, in a communication dated the same day, acknowledged the bank's recent efforts to broaden its loan book but noted that there remains "scope for progress" in this area. Consequently, the regulator has advised Ujjivan SFB to reapply once it demonstrates a more diversified portfolio. Ujjivan SFB had submitted its application for voluntary transition to universal banking status in February 2025. The move was part of the bank's long-term strategy to expand its operations beyond the restrictions of the small finance bank (SFB) model, which primarily focuses on serving underserved and unserved segments with a priority on microfinance and small-ticket lending.