Ujjivan SFB shares fall nearly 6 pc as it fails to get RBI nod for universal bank licence

Mumbai, April 15 Shares of Ujjivan Small Finance Bank fell sharply on Wednesday after the Reserve Bank of India returned its application for a universal banking licence, even as the broader market traded higher.

The stock dropped as much as 5.94 per cent to hit an intra-day low of Rs 56.75 on the Bombay Stock Exchange (BSE), compared to its previous close of Rs 60.34.

The decline came in contrast to the positive trend in the wider market, with the Sensex rising over 1.6 per cent amid improved global sentiment following renewed US-Iran peace talks.

However, the shares of the lender closed at Rs 58.53, down by Rs 1.81 or 3 per cent on Wednesday.

The sharp fall in the lender’s shares follows the RBI’s decision to return its application for a universal banking licence, citing insufficient diversification in its loan portfolio.

In an earlier exchange filing, the bank said the regulator acknowledged its recent efforts to diversify but noted that more progress was needed before it could be considered for a transition to a universal bank.

The central bank has advised Ujjivan Small Finance Bank to reapply after demonstrating a more balanced and diversified asset book.

This marks the second time in recent months that the RBI has returned a similar application from a small finance bank.

As per available data, Ujjivan SFB’s gross loan book stood at around Rs 37,057 crore in the third quarter of FY26, with nearly 45 per cent exposure to group loans, indicating continued reliance on microfinance.

The RBI has consistently encouraged small finance banks to reduce dependence on unsecured microfinance lending and expand into secured segments such as housing, vehicle and SME loans.

The regulator believes diversification is crucial to improving asset quality and reducing risks associated with high non-performing assets, especially during economic stress.

Moving toward a more balanced loan mix is also seen as an important step for small finance banks aspiring to become full-fledged universal banks.

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