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Ujjivan Small Finance Bank Limited has submitted an application to the Reserve Bank of India (RBI) for a universal banking licence. This move marks a significant step for the small finance bank, which was earlier licensed to operate as a small finance bank until March 2021. The bank’s application is subject to the RBI’s approval, which would enable it to expand its services and reach a broader customer base.
As a small finance bank, Ujjivan Small Finance Bank was restricted to serving low-income individuals and small businesses, with a focus on microfinance services. However, with a universal banking licence, the bank would be able to offer a wider range of financial products and services, including corporate banking, project finance, and international trade services. This would not only expand the bank’s customer base but also increase its revenue streams.
The bank’s application follows the RBI’s commitment to deepen financial inclusion and increase access to formal banking services, particularly in underserved regions. Since its inception in 2005, Ujjivan has been focused on serving underserved markets, with a presence in over 2,400 villages and 1,300 towns across the country.
Ujjivan’s application for a universal banking licence is seen as a strategic move to expand its reach and offer more comprehensive financial services to its customers. The bank has been rapidly expanding its services, increasing its deposit base, and building a robust digital ecosystem. With a universal banking licence, Ujjivan would be better positioned to compete with larger private sector banks, while maintaining its focus on financial inclusion and community development.
The RBI is expected to evaluate Ujjivan’s application based on various criteria, including its financial stability, governance structure, and adherence to regulatory guidelines. If approved, Ujjivan would join a select group of few small finance banks that have successfully transitioned to universal banking. The development is expected to be closely watched by the financial sector, as it could set a precedent for other small finance banks seeking to expand their scope of services.