In a regulatory development that has drawn attention across the banking sector, the Reserve Bank of India (RBI) has returned Jana Small Finance Bank’s (Jana SFB) application to transition into a universal bank. The decision was communicated to the bank on October 28, 2025, and stems from the bank’s inability to meet the eligibility norms prescribed under the RBI’s 2024 framework for small finance banks seeking voluntary conversion.
Jana SFB had submitted its application in June 2025, positioning the move as a natural progression in its growth strategy. The bank had cited its consistent financial performance, including maintaining gross non-performing assets (NPAs) below 3% and net NPAs below 1% for two consecutive years—key qualifying parameters under the RBI’s guidelines.
Despite these metrics, the central bank returned the application, stating that the bank had not fulfilled all required conditions. The RBI did not publicly disclose the specific criteria that were unmet, leaving room for interpretation and further clarification. Jana SFB’s Managing Director and CEO, Ajay Kanwal, responded by emphasizing that the application was “returned, not rejected,” and that the bank would work closely with RBI officials to address the gaps and reapply in due course.
Kanwal reiterated the bank’s long-term vision to evolve into a full-fledged universal bank, stating, “Our mission has always been to serve the underserved and build a bank that’s inclusive, agile, digital, and forward-looking. Becoming a universal bank will enable us to offer a broader range of services to our customers.”
The announcement had an immediate impact on market sentiment, with Jana SFB’s shares dipping by 1.72% to ₹448.85 on the Bombay Stock Exchange. Analysts noted that while the setback may delay the bank’s expansion plans, the RBI’s decision reflects its commitment to maintaining rigorous standards for banking transitions.
Jana SFB now joins AU Small Finance Bank and Ujjivan Small Finance Bank in the list of lenders that have sought universal banking licences under the RBI’s updated framework. The development underscores the challenges faced by small finance banks in meeting the regulatory benchmarks required for broader operational mandates.
