Ujjivan Small Finance bank (SFB) is gearing up for a transformative phase as it awaits the Reserve bank of India’s nod to become a universal bank. Alongside this, the lender has unveiled a capital-raising roadmap worth Rs 2,000 crore through a Qualified Institutional Placement (QIP) over the next two years. Here’s a closer look at Ujjivan’s ambitious plans:

1. Universal bank Licence by Year-End?

Ujjivan SFB applied for a universal banking licence in february 2025, and according to MD & CEO Sanjeev Nautiyal, the application is now in the advanced stages after several clarifications with the RBI. The bank expects a final decision by December 2025. While hopeful, Nautiyal clarified that Ujjivan’s five-year growth plan is independent of the RBI’s verdict.

2. Rs 2,000 Crore Fundraising on the Cards

The bank aims to raise Rs 2,000 crore via QIP in the next 18–24 months. This fund infusion is part of its long-term capital strategy and not contingent on regulatory approval. The fresh capital will support Ujjivan’s balance sheet expansion with a target to achieve Rs 1 lakh crore in gross loans by 2030.

3. technology Investments Set to Rise

Currently, Ujjivan spends Rs 200 crore annually on IT, three-fourths of which go into operations and one-fourth into new initiatives. Over the next five years, the bank plans to scale this spend up to Rs 500 crore, underscoring its push for technology-led growth.

4. Strong Focus on Retail & Secured Lending

Retail loans form over 90% of Ujjivan’s balance sheet, with a deliberate pivot towards secured lending. Secured assets have already climbed from 30% in march 2024 to 46% in june 2025, with projections of 65–70% by FY30. This shift is designed to reduce volatility, enhance earnings stability, and bring resilience to the portfolio.

5. Microfinance Portfolio – Stress Behind, Growth Ahead

The microfinance sector has been under pressure for years, but Ujjivan believes the worst is over. With delinquencies peaking across states, Nautiyal noted that a recovery is underway, adding, “The pains are already behind us… growth is around the corner.”

6. Universal bank Tag = Bigger Opportunities

If the RBI grants Ujjivan the universal bank status, it could unlock wider opportunities—enhanced competitiveness, a stronger brand, and the ability to scale faster. However, Nautiyal insists that the core mission of serving grassroots MSMEs, retail borrowers, and driving tech-led banking will continue regardless of the licence outcome.

📌 Bottom Line

With licence clarity expected by December, a Rs 2,000 crore QIP lined up, and a sharper focus on secured lending and technology, Ujjivan SFB is positioning itself for long-term stability and growth. Whether as a small finance bank or a universal bank, its retail-first, grassroots-driven strategy remains firmly intact.

 

Disclaimer:

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.