Ujjivan Small Finance Bank becomes eligible for universal banking license, but has no immediate plan to seek one
Ujjivan Small Finance Bank doesn’t have an immediate plan to seek a universal banking licence despite becoming eligible, managing director Ittira Davis told ET.
The bank’s gross non-performing assets ratio stood below 3% and net NPA ratio below 1% for two consecutive years, making it entitled to apply for a licence.
«Next week, the process of reverse merger will be over. A call on universal banking will be taken later. We are not rushing for it,» Davis said.
Davis will step down on June 30, handing over the baton to former State Bank of India deputy managing director Sanjeev Nautiyal. He will however continue with the bank for another three months as advisor.
The Reserve Bank of India said in April last week that small finance banks willing to apply for the coveted licence need to be listed, profitable and have a net worth of at least Rs 1000 crore. Most of the small finance banks met these criteria but are not eligible due to high bad loan ratios.
On Saturday, Ujjivan reported a 7% rise in net profit at Rs 330 crore for the March quarter against Rs 310 crore in the year ago-period.
Although the bank's quarterly operating profit rose 26% to Rs 519 crore from 411 crore a year ago, net profit growth remained in single digit due to increased provisions for bad loans.
Ujjivan set aside Rs 68 crore towards credit risk out of total Rs 79 crore provisions and contingencies for the quarter while it got a net write back of about Rs 2 crore a year ago.
Net interest margin rose to 9.4% in the March quarter from 9.1% a
