Jana Small Finance Bank share price jumps 20% today. Here's why

Jana Small Finance Bank share price jumped as much as 20% today. The reason behind the share price skyrocketing were its plans to apply for universal bank license, according to reports. In fact, the rise was so big that the share price hit the 20 percent upper circuit. This was at ₹600.35. The bank is expected to apply for the universal bank license by May-June 2025.

Jana Small Finance Bank share price jumps 20% today. Here's why(Pexels)

Recently, the Reserve Bank of India (RBI) issued a circular about Small Finance Banks shifting to Universal Banks if they choose to. The circular outlined new conditions for banks interested in this transition.

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Ajay Kanwal, Managing Director and Chief Executive Officer of Jana Small Finance Bank, told Moneycontrol that it was falling short on just one parameter - non-performing assets (NPA). He said, “We have had our net NPA (NNPA) under percent for one financial year and we will meet the criteria by the end of next financial year.”

He then added the biggest point by saying, “And we will make a formal application by May-June 2025.”

As per RBI rules, small finance banks need to keep their bad loans low, aiming for a net non-performing assets (NNPA) ratio of 1 percent or less over the past two years. Also, they have to meet a certain growth rate (compound annual growth rate - CAGR) every year, show they've made money in the last two years, and ensure their bad loans (gross non-performing assets - GNPA) don't go over 3 percent during the same period.

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