Ujjivan Small Finance Bank's shares fell by over 6% on Wednesday, closing at ₹58.53 on the Bombay Stock Exchange (BSE) after the Reserve Bank of India (RBI) returned its application to convert into a universal bank. The RBI stated that Ujjivan needs to diversify its loan book further before it can be considered for reapplication. The application was initially submitted in February 2025, alongside AU Small Finance Bank and Jana Small Finance Bank. While AU Small Finance Bank has received approval and is transitioning, Jana's application was also returned. According to RBI guidelines, only listed small finance banks with a minimum net worth of ₹1,000 crore and a satisfactory operational track record can apply for a universal banking license. Although diversification is not explicitly required, the RBI is closely evaluating additional factors such as asset quality and governance standards, particularly focusing on gross non-performing assets (NPAs).