Jana SFB dips

Shares of Jana Small Finance Bank declined sharply on today after the Reserve Bank of India (RBI) returned its application to transition into a universal bank, citing non-fulfilment of eligibility criteria.

The stock opened weak at Rs.434.95, after a previous close of Rs.456.70, and slipped to an intraday low of Rs.434.95, before recovering marginally to trade around Rs.446.96 (VWAP), down nearly 5%.

The bank clarified that the RBI has “returned”, not “rejected” its proposal, allowing it to reapply after meeting the stipulated benchmarks. Jana SFB had applied earlier this fiscal (FY26) following steady improvement in asset quality for two consecutive years, with gross NPAs below 3% and net NPAs under 1%. The development delays the upgrade but does not alter the bank’s operational fundamentals or medium-term strategy.

Under current RBI norms, a small finance bank must demonstrate five years of stable operations, profitability, and regulatory compliance before conversion. While Jana has made notable progress, improving its capital position and diversifying its loan book, it still trails larger peers such as AU SFB on return ratios, capital adequacy, and earnings consistency. The central bank’s cautious stance reflects its emphasis on governance standards and long-term balance-sheet resilience before allowing universal banking status.

Market participants see this as a procedural setback rather than a structural negative. The bank’s progress on capital efficiency, asset quality, and liability cost management will determine its next re-application window, likely by FY27.