The Reserve Bank of India (RBI) has returned Ujjivan Small Finance Bank's application to convert into a universal bank, citing the bank's concentrated loan book as a concern. Ujjivan had submitted its application in February 2025 as part of its long-term growth strategy. In its communication, the RBI noted that while Ujjivan has made efforts to diversify its loan portfolio, further progress is needed. Currently, Ujjivan's gross loans amount to ₹37,057 crore, with 48% classified as secured loans. The bank aims to increase the share of secured loans to 65-70% by March 2030. Ujjivan Small Finance Bank, which began operations in February 2017, operates 777 branches and has a gross non-performing assets (NPA) ratio of 2.4%. The RBI's guidelines for small finance banks transitioning to universal banks require a satisfactory operational track record and consistent profitability. Ujjivan was one of three small finance banks that applied for this transition, alongside AU Small Finance Bank and Jana Small Finance Bank, with AU receiving 'in-principle' approval in August 2025.