The Reserve Bank of India (RBI) has rejected Jana Small Finance Bank’s (SFB) application to become a universal bank, the bank announced on Tuesday, stating that it did not meet the necessary qualifying requirements.

Early in current fiscal year (FY26), the bank filed its application after fulfilling a crucial requirement under the RBI’s framework: keeping net non-performing assets (NPAs) below 1% and gross NPAs below 3% for two years in a row.

But according to the central bank, the application was returned because it did not meet other eligibility requirements.

In its stock exchange filing, the lender with its headquarters in Bengaluru stated, “In continuation of our letter dated June 9, we wish to convey that the RBI has returned the application made for Voluntary Transition to Universal Bank due to non-fulfillment of the criteria mentioned in the RBI circular in this regard.”

Shares of Jana SFB dropped 2.14 percent to Rs 446.4 on the BSE after the announcement.

The stock has dropped by Rs 7.05, or 1.55%, over the previous month, but it has gained Rs 9.40, or 2.14 percent, over the last five days.

The shares of Jana SFB have decreased by Rs 68.95, or 13.35%, over the past six months. However, the stock is still up Rs 43.90, or 10.87 percent, year-to-date (YTD).

With 802 branches serving more than 12 million customers in 23 states and two Union Territories, Jana Small Finance Bank was founded in 2018 and is currently the fourth-largest small finance bank in India.

The bank posted a net profit of Rs 75 crore in the second quarter of FY26, bringing its first-half profit to Rs 177 crore.

It had a net interest margin (NIM) of 6.6%, gross non-performing assets (NPAs) of 2.8%, and net NPAs of 0.9%.