Jana Bank Starts Transition Towards Full-Fledged Universal Banking Operations

In July, 2024, AU SF Bank got the RBI’s nod to transition from a Small Finance Bank to a universal bank. Similarly, Equitas SF Bank also wanted to achieve the same. And now, Jana Small Finance Bank has submitted the application to the RBI, to transition from a Small Finance Bank to a Universal Bank.

But why? How does this transition affect its account holders?

Ease Of Process to Become a Universal Bank

Just like a UPI payment, now Small Finance Bank can apply to become a universal bank with the RBI’s “On Tap” licensing policy.

This is what banks have to do:

Ab “Bada Bank” Banega Jana: Application Details and Timeline

Jana Small Finance Bank (Jana SFB), India’s 4th largest Small Finance Bank in terms of deposits. Not only this, Jana SFB featured in “Fortune- Top 500” largest corporations in India in 2017.

These are the application details and timeline

This move was disclosed in the latest regulatory filings and has been in the pipeline since the beginning of fiscal year 2025. According to sources close to the matter, Jana submitted its formal expression of interest to the RBI in Q1 FY25, following the completion of the mandatory five-year operational period after receiving the SFB licence in 2018.

License to Expand: Eligibility Criteria for Universal Bank Status

Not every Small Finance Bank can transition to a Universal Bank. The RBI has laid down stringent eligibility conditions under the Guidelines for ‘on-tap’ licensing of Universal Banks and the Small Finance Bank licensing norms.

Here are the key criteria Jana SFB must meet

Given Jana’s recent efforts to clean up its loan book, improve provisioning, and enhance corporate disclosures, analysts believe it stands a reasonable chance of meeting these benchmarks.

“Mere Account Ka Kya?” Impact on Jana’s Retail Account Holders

For the average Jana customer, the shift from a Small Finance Bank to a Universal Bank could mean significant upgrades in banking services. Here's what could change:

However, with this transition, customers might also face changes in compliance norms, KYC updates, or slight disruptions during the transition phase.

“Picture Abhi Baaki Hai”: Market Perception and Stock Impact

The transition could act as a double-edged sword for Jana’s public image and investor sentiment, especially if the RBI decision tilts towards approval or rejection.

Jana Bank’s upcoming IPO, slated for FY26, could also be directly impacted by this decision, either as a catalyst or a roadblock to investor enthusiasm.

Conclusion

Jana Small Finance Bank’s move to transition into a Universal Bank reflects not just ambition but readiness to play in the big league. With the RBI’s increasing openness to such transitions and a maturing fintech-banking landscape, this 
decision could either set a new benchmark or serve as a cautionary tale. 

All eyes are now on the RBI’s verdict, which could be a game-changer for both Jana and the evolving SFB ecosystem.

FAQs

Q1. Why is Jana Small Finance Bank applying for a Universal Bank licence?
 To expand its services beyond SFB limitations and become a full-service commercial bank.

Q2. How long does it take for the RBI to process such transition requests?
 It typically takes 6 to 12 months, depending on compliance and eligibility reviews.

Q3. Will existing Jana SFB customers need to take any action during the transition?
 No immediate action is needed unless the bank requests KYC updates later.

Q4. How will this transition affect Jana Bank’s upcoming IPO?
 An RBI approval could boost IPO valuation and investor interest significantly.

Q5. What happens if the RBI rejects Jana SFB’s application to become a Universal Bank?
 The bank will continue as an SFB and may reapply after meeting RBI requirements.

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