In a regulatory disclosure, Jana confirmed that its board has given the green light for the application, and the proposal is now under the RBI’s consideration. The upgrade will allow Jana to offer a broader suite of financial products, such as credit cards, foreign exchange services, and large-ticket loans–services currently outside the scope of SFBs.
Jana, which began its journey as a small finance bank in 2017, has now completed the RBI-mandated five-year operational requirement—a key eligibility criterion for SFBs aspiring to become universal banks.
The big opportunity and bigger challenge
At the heart of the move lies the potential to raise larger deposits and serve a broader customer base. Universal banks have access to cheaper capital through current and savings accounts (CASA) and can scale operations across customer segments and geographies. But the journey from niche lender to universal bank comes with its own set of hurdles.
“Many small finance banks are in a wait-and-watch mode. If they meet capital adequacy norms and are compliant, the transition to a universal bank can open significant opportunities. But it’s not an easy path—it comes with tighter regulations, enhanced governance, and greater scrutiny,” said Kranthi Bathini, Equity Strategist at WealthMills Securities Pvt Ltd.
He adds that the regulatory bar is higher for universal banks, requiring more robust risk management systems and stronger internal controls.
Winning customer trust is key
Beyond regulatory compliance, the biggest challenge, according to analysts, lies in earning customer trust and building brand credibility in a crowded market dominated by legacy players.
“Becoming a universal bank allows for economies of scale, which is a major advantage. But banks like Jana will need to work hard to convince customers to shift their money from trusted brands like HDFC or ICICI,” Bathini explained. “That is the real test, not just becoming a universal bank on paper, but proving you are dependable, competitive, and digitally savvy enough to compete in that league.”
