Buzzing stock: Ujjivan Small Finance Bank gets scheduled bank status from RBI

Ujjivan Financial Services, a subsidiary of Ujjivan Small Finance Bank, has received scheduled bank status from the Reserve Bank of India (RBI). This subsidiary of the company has been included in the second schedule to the Reserve Bank of India Act, 1934.

With the scheduled bank status, the company informed that now it can issue certificate of deposits but there will not be much change in terms of the asset mix. As per its management, the liability side may see an increase in fixed deposits and certificate of deposits, which would bring down the cost of funds. Currently the borrowing cost is at 10.5 percent and the new borrowings might bring it down to 7 percent.

According to the bulk deal data by the NSE, the UK government’s development finance institution, CDC Group Plc, sold 5 percent stake in Ujjivan Financial Services for more than Rs 212 crore, through an open market transaction on Wednesday.

On Wednesday, the stock surged by 10.2 percent and closed at Rs 358.15 on the BSE. Today it has opened at Rs 365 and touched intra-day high of Rs 374 in the morning session. So far in this year, the scrip has rallied by 11.3 percent.