Jana Small Finance Bank Shares Slip After RBI Returns Universal Bank Application

Market Performance

The spotlight turned to Jana Small Finance Bank shares on Tuesday as the stock witnessed a sharp intraday decline.

Shares fell nearly 6%, hitting a day’s low of ₹431 on the NSE, snapping a three-day winning streak.

The decline followed the bank’s disclosure to exchanges that the Reserve Bank of India (RBI) has returnedsent back its application for conversion into a universal bank, citing non-fulfilment of the criteria set out in the regulator’s guidelines.

Despite the brief setback, the stock remains among the most-watched counters in the stock market today, given its consistent momentum in recent sessions.

Main News

In a regulatory filing, Jana Small Finance Bank confirmed that the RBI has returned the bank’s application “made for voluntary transition to a universal bank due to non-fulfilment of the criteria mentioned in the RBI circular.”

The communication from the regulator reached the bank late Monday.

According to Managing Director and CEO Ajay Kanwal, the RBI’s note did not specify the detailed reasons for returning the proposal.

Kanwal maintained a composed tone while addressing the development, clarifying that this is “a return, not a rejection.”

He assured that the bank plans to engage with senior RBI officials this week to understand the feedback and make necessary adjustments before resubmitting the application.

“We will soon figure out what the answer really is and rectify as per expectations,” Kanwal said, emphasizing that the move should not be seen as a setback.

No specific timeline has been shared yet for when the application might be filed again.

Company Details

The management clarified that the RBI’s decision would not affect the bank’s ongoing operations or asset-side performance. Jana SFB will continue to conduct most of the activities permitted under universal banking guidelines.

However, one limitation remains — the bank cannot currently participate in co-lending, which will stay restricted until universal status is approved.

From a liability perspective, Kanwal pointed out that the universal bank licence would have helped reduce the cost of funds. That benefit, for now, stands deferred.

He also mentioned that the recent restructuring of the bank’s parent organisation has no link to its universal banking plans and should not be interpreted as a related move.

Sector Backdrop

The small finance banking space has been in the spotlight, with several institutions seeking to upgrade to universal banking status. The regulator’s cautious approach underscores the importance of strong compliance and financial stability before such transitions.

For Jana Small Finance Bank, the update marks a pause, not a stop, in its long-term journey toward broader banking operations.

The bank’s steady loan book growth, customer reach, and digital expansion remain its core strengths — aspects that will likely guide its next phase once regulatory clarity emerges.

Summary

• Stock movement: Jana Small Finance Bank share fell up to 5.79%, hitting ₹431 on NSE.
• Reason: RBI returned the bank’s application for universal bank transition due to criteria non-fulfilment.
• Management statement: CEO Ajay Kanwal confirmed the matter is “a return, not a rejection.”
• Next steps: Bank to meet RBI officials and address concerns before resubmitting.
• Impact: No change in asset-side operations; co-lending remains restricted for now.