As per RBI norms, SFBs must be in business for five years, maintain a net worth of at least ₹1,000 crore, make a profit for the last two financial years and keep bad loans below 3% gross and 1% net.
The Reserve Bank of India (RBI) has ‘returned’ Jana Small Finance Bank’s (Jana SFB) application to convert into a universal bank, an exchange filing shows.
“…we would like to clarify that the RBI has returned the application for voluntary transition to the Universal Bank as the criteria mentioned in the RBI circular in this regard have not been met…,” Jana SFB said.
Earlier this year, AU SFB became the first lender to receive in-principle approval to convert into a universal bank. In addition to Jana SFB, Ujjivan SFB has also applied for conversion to a universal bank, while Fino Payments Bank has applied for conversion to an SFB.
Eligibility rules for SFBs
SFBs may apply for a universal banking license upon successful completion of five years of operations, provided they meet the minimum paid-up voting share capital and net assets requirements applicable to universal banks.
As per the RBI guidelines, to transition to a universal bank, an SFB must be listed on a recognized stock exchange, have a minimum net worth of ₹1,000 crore at the end of the previous quarter, meet the minimum capital requirements of SFBs and post a net profit in the last two financial years.
The SFBs must also have gross and net non-performing asset ratios (GNPA, NNPA) of not more than 3% and 1% respectively for the last two financial years.
“There is no mandatory requirement for an eligible SFB to have an identified promoter. However, the existing promoters of the eligible SFB, if any, will continue as the promoters on transition to the Universal Bank,” the RBI said, adding that eligible SFBs with a diversified loan book will be given preference for the universal banking license.
(This is a developing story, check back for updates)
Published on October 28, 2025
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