The Reserve Bank of India (RBI) has turned down the application of Ujjivan Small Finance Bank to be granted the status of a universal bank, the lender said on Monday.
The bank had applied with the RBI in February last year for the status, but the regulator has asked the lender to diversify its loan portfolio.
“The RBI 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 bank said in a regulatory filing.
“Therefore, the RBI has returned the above-mentioned application and advised the Bank to consider applying again after demonstrating a diversified loan portfolio,” it further added.
In a separate statement, the bank assured that it will work upon the directions of the lending regulator to apply again for universal bank status with the RBI.
“Ujjivan will continue to embark on the path of diversification and will resubmit the application in due course, keeping RBI’s guidance in view,” it said.
The status of a universal bank allows a lender to offer a wide range of financing products instead of serving only underserved segments.
RBI’s minimum requirements for banks to seek universal bank status require lenders to have a net worth of at least Rs 1,000 crore, a diverse lending record, maintenance of minimum capital requirements, along with a satisfactory track record in the last five years, profitability, and controlled non-performing assets.
As of December last year, Ujjivan had a loan book of Rs 37,050 crore with deposits of Rs 42,220 crore.
The last time the RBI had given universal bank status to a small finance bank was in August last year on the application of AU Small Finance Bank. This was the first time in almost a decade that a new universal bank was added to the list of lenders.
