Mumbai | October 28,2025 | SKY LINK TIMES
Jana Small Finance Bank:
The Reserve Bank of India (RBI) has returned Jana Small Finance Bank’s (SFB) application to transition into a universal bank, citing the non-fulfilment of required eligibility criteria, the Bengaluru-based lender said on Tuesday.The development marks a temporary setback for Jana SFB’s expansion plans as it aimed to join the ranks of full-service commercial banks in India.
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RBI Cites Eligibility Gaps
In its stock exchange filing, Jana Small Finance Bank said,
> “In continuation to our letter dated June 9, we wish to convey that the RBI has returned the application made for Voluntary Transition to Universal Bank due to non-fulfilment of the criteria mentioned in the RBI circular in this regard.”
The bank had submitted its application earlier this fiscal year (FY26) after fulfilling one of the key RBI conditions — maintaining gross non-performing assets (NPAs) below 3% and net NPAs under 1% for two consecutive years.
However, according to the central bank, other eligibility requirements were not met, prompting the return of the application.
Market Reaction: Shares Slip 2%
Following the announcement, shares of Jana Small Finance Bank fell 2.14% to ₹446.4 on the BSE.
Over the past five days, the stock had gained ₹9.40 (2.14%).
In the past month, it declined by ₹7.05 (1.55%).
Over six months, shares dropped ₹68.95 (13.35%).
Yet, on a year-to-date (YTD) basis, the stock remains up by ₹43.90 (10.87%).
Market analysts said the RBI’s decision could temporarily impact investor sentiment, though the bank’s fundamentals remain stable.
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Strong Financial Performance Despite Setback
Established in 2018, Jana Small Finance Bank is India’s fourth-largest small finance bank, serving over 12 million customers across 23 states and two Union Territories through 802 branches.
In the second quarter (Q2) of FY26, the bank reported a net profit of ₹75 crore, bringing its first-half profit to ₹177 crore.
Its net interest margin (NIM) stood at 6.6%, with gross NPAs at 2.8% and net NPAs at 0.9%, comfortably within regulatory thresholds.
What’s Next for Jana Small Finance Bank
The bank’s management has yet to indicate whether it plans to reapply for a universal banking licence after meeting all criteria.
Analysts suggest Jana SFB may need to strengthen capital buffers and broaden its business mix to meet RBI’s expectations for a universal bank status.
For now, Jana SFB will continue operating under its existing small finance bank framework while maintaining focus on financial inclusion, digital expansion, and asset quality improvement.
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