New Delhi, Oct. 28 -- The Reserve Bank of India (RBI) has returned Jana Small Finance Bank's application for a voluntary transition to a universal bank, citing non-fulfilment of eligibility criteria, the lender said in a stock exchange filing.
The Bengaluru-headquartered bank, backed by Tree Line Investment, TPG Capital Asia, and Morgan Stanley, had applied in June to transition from a small finance bank to a universal bank. Jana didn't specify which criteria it failed to meet.
The application was filed under the RBI's April 2024 circular governing the voluntary transition of small finance banks to universal banks.
As per the norms, an applicant must have a minimum net worth of Rs 1,000 crore ($113 million), report net profits in the past two financial years, and maintain gross and net non-performing asset (NPA) ratios of less than or equal to 3% and 1%, respectively, over the same period.
Jana's net profit declined to Rs 75 crore in the September quarter from Rs 97 crore a year ago. It had reported a profit of Rs 102 crore in the June quarter. The bank closed FY25 with gross net NPA ratios of 2.8% and 0.9%, respectively.
Jana was launched in 2018 with a focus on microfinance. Currently, secured loans comprise around 73% of its overall loan book.
In comparison, AU Small Finance Bank received the central bank's in-principle approval in August to transition to a universal bank, while Ujjivan Small Finance Bank's approval remains under review.
Published by HT Digital Content Services with permission from VC Circle.