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Ujjivan Small Finance Bank (SFB), a leading microfinance institution in India, has applied for a universal banking license from the Reserve Bank of India (RBI). This move aims to expand the bank’s services beyond its current microfinance business and cater to a broader customer base. With a universal banking license, Ujjivan SFB will be able to offer a wider range of financial products and services, including deposit mobilization, savings accounts, and term deposits, in addition to its existing microfinance offerings.
Ujjivan SFB has been operating as a small finance bank since 2017, focusing on serving the unbanked and underbanked segments of the population. With a presence in over 24 states and a network of over 750 branches, the bank has successfully served over 5.5 million customers, with combined loan disbursals exceeding ₹1,300 crore.
The application for a universal banking license is part of the bank’s strategy to scale up its operations and expand its reach. The bank’s management team believes that this will enable them to take advantage of the growing demand for financial services in India, particularly in the segments that are currently underbanked.
The RBI has been encouraging small finance banks to apply for a universal banking license, with a view to increasing financial inclusion and deepening financial markets. The bank has also received support from global investors, including the likes of Blackstone Group, Cathay Life Insurance, and ICICI Bank, which has provided a Rs 1,200 crore investment in Ujjivan SFB in 2017.
If granted a universal banking license, Ujjivan SFB will be able to leverage its existing infrastructure and experience in microfinance to expand its services and customer base. This will enable the bank to offer a broader range of financial products and services, including deposits, savings accounts, and fixed-income instruments, in addition to its existing microfinance offerings. The bank’s expansion plans are expected to create new job opportunities and contribute to the growth of the Indian economy, thereby reinforcing the country’s position as one of the world’s fastest-growing economies.