Jana SFB Plans Universal Bank Licence Application
Why in the news
Jana Small Finance Bank, according to its MD and CEO Ajay Kanwal, would approach RBI in May 2025 to become a universal bank.
Key facts
- Meets conversion norms: gross NPA 2.5%, net NPA 0.9% (FY25), two years of profit, listed, net worth above ₹1,000 crore, scheduled status.
- Aims: cheaper deposits, better CASA ratio, secured-to-unsecured loans at 80:20 (now 70:30).
About universal banking
A universal bank provides retail, commercial and investment services under one roof.
On-tap licensing (August 2016)
| Applicant | Condition |
|---|---|
| Individuals | Resident; 10 years of senior banking or finance experience |
| Private entities | Resident-owned; 10-year record; large industrial houses excluded, but may hold up to 10% |
| NBFCs | Resident-controlled; 10-year record |
| Small finance banks | Net worth ₹1,000 crore+, scheduled, 5-year record, gross NPA up to 3%, net NPA up to 1%, listed |
- NOFHC: mandatory for promoters with group entities; promoter group owns at least 51%.
- Capital: ₹5 billion voting equity; promoters hold 40% at first, locked in 5 years, falling to 15% in 15 years.
- Foreign stake up to 74%; majority independent board; Banking Regulation Act, 1949 applies.
- Inclusion: 25% of branches in unbanked rural centres; listing within 6 years.
Exam angle
- Policy year: 2016; foreign cap: 74%; rural branch share: 25%.