“The RBI has returned the application made for voluntary transition to a universal bank due to non-fulfilment of the criteria mentioned in the RBI circular in this regard,” Jana Small Finance Bank stated in its filing.

For an SFB to transition into a universal bank, it must meet a series of eligibility requirements laid out by the RBI. The bank should have a minimum net worth of Rs 1,000 crore and be operating as a scheduled bank with a satisfactory performance record for at least five years. Financially, it must have posted net profits in the past two financial years, with gross non-performing assets not exceeding 3% and net NPAs capped at 1% over the same period. The bank’s shares also need to be listed on a recognized stock exchange.

Additionally, the RBI does not allow the introduction of new promoters or changes to existing promoter structures during the transition process. Any previously approved promoter shareholding dilution plan must remain unchanged. Preference is generally given to SFBs that have a well-diversified loan portfolio, signaling stability and reduced risk.

The move delays the Bengaluru-based lender's plans to expand its operations and product offerings under a universal bank license. Jana Small Finance Bank, which began operations as a small finance bank in 2018, has been aiming to upgrade its status as part of its long-term growth strategy.

Jana Small Finance Bank, a scheduled commercial bank, is the 4th largest Small Finance Bank in India. The bank has a national presence across 23 states and 2 union territories, spread across 814 branches.

On a standalone basis, net profit of Jana Small Finance Bank declined 22.47% to Rs 74.99 crore while net interest income rose 4.04% to Rs 618 crore in Q2 September 2025 over Q2 September 2024.