Synopsis: The Reserve Bank of India (RBI) has turned down Jana Small Finance Bank’s proposal to transition into a universal bank, citing gaps in meeting the regulator’s prescribed financial and operational eligibility standards.
This company offers a wide range of financial products, including savings accounts, fixed deposits, microloans, MSME financing, and affordable housing loans is now in the spotlight after Reserve Bank of India (RBI) has returned the bank’s proposal to transition into a universal bank
With market capitalization of Rs. 4,671 cr, the shares of Jana Small Finance Bank Ltd is currently trading at Rs. 448.45 per share, dropping 5% in today’s intraday session making a low of Rs. 431, from its previous close of Rs. 457.50 per share.
News
The Reserve Bank of India has returned Jana Small Finance Bank’s application to transition into a universal bank, citing non-fulfilment of the eligibility criteria laid out in its recent guidelines.
Jana SFB had submitted the application in June 2025, but the RBI found that certain criteria were not sufficiently met as per the universal bank framework.
The decision postpones Jana SFB’s plans for broader banking operations, with the bank now expected to focus on its core small finance banking business while working towards meeting the required benchmarks for future consideration.
According to the RBI’s on-tap licensing framework, a Small Finance Bank (SFB) can apply to become a universal bank only after fulfilling specific conditions. The bank must have been listed on a recognised stock exchange and held scheduled status with a consistent track record of at least five years.
It should also have a minimum net worth of Rs. 1,000 crore as of the most recently audited quarter and maintain the capital adequacy (CRAR) levels required for SFBs. In addition, the institution must have posted net profits in each of the last two financial years and ensured its gross and net NPAs remained at or below 3% and 1%, respectively, during the same period.
About the company
Jana Small Finance Bank Ltd is one of India’s leading small finance banks, focused on serving underserved and unbanked segments of the population. It offers a wide range of financial products, including savings accounts, fixed deposits, microloans, MSME financing, and affordable housing loans. Headquartered in Bengaluru, the bank has a strong presence across urban, semi-urban, and rural areas.
The company reported a 12% year-on-year rise in sales to Rs. 1,305 crore in Q2FY26, compared to Rs. 1,166 crore a year ago. EBIDT grew 6% to Rs. 514 crore from Rs. 485 crore, reflecting steady operational performance. Net profit declined 22% to Rs. 75 crore versus Rs. 96.7 crore in Q2FY25, with EPS falling 23% to Rs. 7.13.
Jana Small Finance Bank Ltd has delivered an impressive 72.4% CAGR profit growth over the last five years, reflecting strong operational expansion. The bank maintains a Return on Capital Employed (ROCE) of 8.15% and a Return on Equity (ROE) of 13.0%, indicating efficient capital utilization. Currently, the stock is trading at 1.12 times its book value.
Written by Manideep Appana
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
The post Bank stock falls 5% after RBI returns application to become universal bank appeared first on Trade Brains.