The central financial institution has additionally suggested Ujjivan to contemplate making use of once more after demonstrating a diversified asset pool.
“The RBI by means of their aforesaid letter took be aware of the financial institution’s latest efforts towards diversification of its mortgage portfolio. Nonetheless, they have been of the view that there’s scope for progress on this space,” Ujjivan stated Monday in a inventory change discover.
The regulator returned the applying Monday.
Ujjivan’s gross mortgage portfolio stood at Rs 40,655 crore on the finish of March, and almost 52% of the property embody unsecured loans. The share of unsecured loans was 56.5% a 12 months again.
“The appliance for transitioning to a common financial institution was submitted as a part of the financial institution’s long-term development plans. Ujjivan will proceed to embark on the trail of diversification and can resubmit the applying in the end, conserving RBI’s steerage in view,” the financial institution stated in an announcement.
Though the regulator needs common financial institution candidates to have diversified portfolios amongst different monetary standards comparable to unhealthy mortgage ratio and profitability, it didn’t spell out particular particulars associated to diversification of loans in its pointers for making an software.A bit of over 36% of the financial institution’s complete portfolio are loans given to joint legal responsibility group members as of March 2026. The remaining a part of the unsecured loans got as particular person loans.
Housing loans contributed about 26% of the entire enterprise. The financial institution additionally affords loans to small companies (MSME loans), car loans, agri loans and gold loans.
Earlier, in October final 12 months, RBI additionally returned the common banking software by Jana Small Finance Financial institution.
Out of three common banking candidates within the small finance financial institution house, solely AU Small Finance Financial institution obtained an in-principle licence thus far.
A common banking license would offer small finance banks some aid by way of capital adequacy and precedence sector lending necessities. The capital adequacy ratio after such a transition would come down from the current 15% norms whereas the precedence sector lending goal could be decrease at 40% as an alternative of 60%. Then the norm of getting a minimum of 50% of the mortgage portfolio in loans lower than Rs 25 lakh doesn’t apply for greater banks.
