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 EXECUTIVE SUMMARY:

The project is entitled on "A Study on Credit Risk Management" in a Ujjivan Small
Finance Bank, Sagar as a part of curriculum activity of MBA course the project duration was
6 weeks. The project also includes the various things that I could learn and experience in the
company which helped to know the functioning of a company.
4
This project presents an overview of India’s banking sector with a particular emphasis on
Ujjivan Small Finance Bank (USFB), an institution dedicated to to promote financial
participation in marginalized groups. The Sagara branch serves as a vital link between rural
customers and modern banking services, providing fixed deposits, savings accounts, and
various loan products such as microfinance, housing, MSME, and gold loans. USFB’s major
strengths include strong customer trust and effective use of digital platforms; however, it
continues to face challenges related to its heavy reliance on microloans, low CASA ratio, and
limited presence in urban markets.

The financial analysis reveals robust growth across MSME, Micro Banking, and Housing loan
segments, with MSME loans achieving an impressive CAGR of 156.36%. Deposits have grown
significantly from ₹13,135.77 lakh in 2021 to ₹37,630 lakh in 2025, while advances have
increased from ₹14,493.95 lakh to ₹31,390 lakh, largely supported by efficient deposit
mobilization. Although the bank maintains a strong Capital Adequacy Ratio of around 23%
and has strategically shifted toward lower-risk loan categories, its long-term sustainability will
rely on continued portfolio diversification and efficient handling of credit risk in the
microfinance segment.
 CHAPTER 1

INTRODUCTION

1.1 INTODUCTION:

Banking is a fundamental pillar of any economy, serving as the foundation for financial growth
and development. It provides an essential platform for collecting public savings and converting
them into productive investments. Acting as a bridge between depositors and borrowers, banks
enable the smooth circulation efficient handling of credit risk in the financial system. Banking
organisations nowadays offer a broad range of services, such as taking deposits, making loans,
providing credit, enabling transfers, and giving investment advice.

In the past, moneylenders performed basic banking functions, which is how the idea of banking
originated. This unofficial system developed into a formally organised and professionally run
industry over many generations. The Indian Reserve Bank (RBI), which is in charge of
overseeing and controlling banking operations in India, is essential to preserving monetary
stability.

India's banks fall into a number of groups, including foreign banks, cooperative banks,
government-owned banks, private banks, and recently founded small finance institutions. Each
category caters to different segments of society and fulfills unique financial requirements. With
rapid digitalization, the industry has embraced innovations like internet banking, digital
wallets, Unified Payments Interface (UPI), and the rise of fintech companies.

Additionally, banks actively support government agendas through participation in social

welfare programs, rural development plans, and infrastructure investments. For a country to
develop, its banking system must be robust and effective. As a result, bolstering the banking
industry is a national goal together with a financial need.

1.2 INDUSRTY PROFILE:

The industry of financial services forms a crucial foundation for the economy of country
stability and growth. It offers a well-organized framework for handling financial transactions
and delivering various services to individuals, companies, and government bodies. Banks are
crucial in obtaining savings from individuals and allocating them to people in need of money
for investments, business ventures, or consumption. Banking contributes to both personal
wealth and overall economic growth in this way.
Banking has its roots in the informal financial services provided by private moneylenders
thousands of years ago. These customs developed into the official institutions that exist today
over time. Today’s banks deliver a broad spectrum of services, including issuing Electronic
payment cards, transmitting funds electronically, funding both large and small enterprises, and
providing investment advice. They do much more than just take deposits and make loans. The
establishment of central banks and enforcement of official rules have enhanced the safety and
dependability of the financial system.

The banking network in India comprises multiple categories of banks designed to meet the
needs of diverse clientele. These include government-owned public sector banks, Privately run
banks, foreign-owned banks, and cooperative banking organizations, and specialized small
finance banks. Each type focuses on a particular market—some serve urban areas while others
reach out to rural and remote populations. This variety ensures that banking services can be
delivered across the entire economic and geographic spectrum.

Banks are instrumental in channeling savings into productive use by giving out loans for
agriculture, education, business development, infrastructure, and housing. These loans help
people and businesses grow while also contributing to national development. Banks also work
closely with the government by managing public finances, supporting social development
schemes, and promoting financial inclusion through services like basic savings accounts and
micro-loans for the underprivileged.

The Indias Banking Industry has transformed considerably due to technological innovations.
Nowadays, there are more financial services available, especially in rural and semi-urban areas.
Because of the digital services that banks provide, including online banking, UPI transactions,
mobile apps, and online platforms. Consumers may now pay their bills, check balances,
manage their finances, and transfer money all without physically visiting a bank, which greatly
increases efficiency and convenience.

Despite this progress, the banking sector faces several ongoing challenges. A major concern is
the growing level of non-performing assets (NPAs), where borrowers default on their loans,
affecting the financial stability of banks. Additionally, the rise in cyber threats and online fraud
calls for stronger digital security measures. Fintech companies, which frequently use cutting-
edge technology to provide quicker and more individualised financial services, are another
growing threat to traditional banks.

However, banking still has a promising future. Banks may increase the security and quality of
their services by implementing smart technology and digital tools like blockchain, biometric
verification, and artificial intelligence. Increasing banking accessibility in remote areas,
strengthening risk management procedures, and emphasising client satisfaction will all
contribute to the growth and legitimacy of the industry.

In summary, the financial services sector is crucial to a nation's financial development by

encouraging savings, enabling credit, supporting investments, and facilitating smooth payment
systems. With continuous innovation and regulatory support, the sector is poised to become
more inclusive, efficient, and impactful for all sections of society.

1.3 COMPANY PROFILE:

Fig No: 1.1

A well-known bank in India, Ujjivan Small Finance Bank (USFB) works to advance financial
inclusion, particularly for marginalised and economically disadvantaged groups. In the
Karnataka district of Shivamogga, Kalmane hamlet, which is part of Sagara Taluk, is home
one of its significant branches. This branch is Important for providing financial assistance to
communities in adjacent rural and semi-urban localities. The Sagara branch is conveniently
located for locals at D.R. No. 234/142, Survey No. 67, Chipli Lingadahalli, Kalmane - 577417.

This branch provides a wide variety of banking services, tailored to meet the diverse needs of
individuals, small traders, farmers, and self-employed persons. The major services include:
 • Deposit Services: A range of accounts—including current, savings, recurring deposit,
and fixed deposit accounts—is available to clients. Such programs are especially
effective in fostering a culture of saving among rural populations.
• Loan Services: The branch offers multiple loan products based on customer needs:
o Microfinance Loans for women organized in self-help groups to support their
small businesses.

o Loans for Micro and Small Enterprises (MSEs), useful for local traders and
shop owners.

o Home Loans for buying, building, or renovating houses.

o Vehicle and Two-Wheeler Loans for personal or commercial use.

o Agricultural Loans for farmers engaged in cultivation or allied activities.

o Gold Loans, which are quick loans secured against gold jewellery for
immediate needs.

Through services including internet banking, missed-call or SMS banking, and the "Hello
Ujjivan" mobile application, the branch also prioritises digital banking. These systems enable
customers to efficiently manage their accounts. make transactions, and check their balances
without physically visiting the office. CDMs (Cash Deposit Machines) and ATMs with
biometric access are also available for anyone who would rather handle their own banking.

One of the highlights of this branch is its customer-friendly approach. The staff are trained to
communicate in local languages, which helps build trust and improves understanding for rural
customers.

In addition, the branch regularly conducts financial awareness programs and literacy
campaigns to educate people about safe banking, savings habits, and responsible borrowing.

Despite being technologically upgraded, the branch still provides personalized service,
ensuring that even first-time bank users feel confident and welcomed. It also implements
several government schemes such as:

• Prime Minister’s Jan Dhan Scheme (PMJDY)

• Atal Pension Yojana (APY)

• PM Jeevan Jyoti Bima Yojana (PMJJBY)

 • PM Suraksha Bima Yojana (PMSBY)

These schemes are aimed at promoting financial security among low-income households by
offering zero-balance accounts, pension plans, and low-premium insurance.

The Kalmane branch serves as a bridge between modern banking and rural India, helping local
communities gain access to secure savings and essential credit services. From small farmers to
small business owners, many depend on this branch to manage their financial needs.

The Ujjivan Small Finance Bank branch at Kalmane in Sagara Taluk is more than just a banking
center—it represents progress, trust, and inclusion. With its range of services, focus on
technology, and local engagement, it continues to uplift and support the financial lives of
people in the region.

1.4 PROMOTERS:

Table No:1.1

1 Audit Committee 1. Ms. Sudha Suresh - Chairperson

2. Mr. Ravichandran Venkataraman
3. Ms. Rajni Mishra
4. Mr. Rajesh Jogi
5. Ms. Mona Kachhwaha
2 Risk Management 1. Mr. Rajesh Jogi -Chairperson
Commitee 2. Mr. B A Prabhakar
3. Ms. Rajni Mishra
4. Ms. Sudha Suresh
5. Ms. Mona Kachhwaha
6. Mr. Sanjeev Nautiyal
3 Nomination and 1. Ms. Rajni Mishra - Chairperson
Remuneration 2. Mr. B A Prabhakar
Committee 3. Mr. Ravichandran Venkataraman
4. Mr. Rajesh Jogi
4. Stakeholder Relationship 1. Mr. B A Prabhakar - Chairperson
Committee 2. Ms. Sudha Suresh
3. Mr. Ravichandran Venkataraman
4. Mr. Sanjeev Nautiyal
5. IT Strategy Committee 1. Mr. Ravichandran Venkataraman
- Chairperson
2. Mr. B A Prabhakar
3. Mr. Rajesh Jogi
4. Ms. Sudha Suresh
5. Mr. Sanjeev Nautiyal
6. Ms. Carol Furtado
6. Customer Service 1. Ms. Rajni Mishra -Chairperson
Committee 2. Mr. B A Prabhakar
3. Ms. Carol Furtado
4. Ms. Sudha Suresh
7. Special Committee of 1. Mr. Ravichandran Venkataraman
Board for Monitoring - Chairperson
and Follow-up of cases 2. Mr. B A Prabhakar
of Frauds 3. Mr. Rajesh Jogi
4. Ms. Sudha Suresh
5. Mr. Sanjeev Nautiyal
8. Review Committee of 1. Mr. Sanjeev Nautiyal -
Wilful defaulters Chairperson
2. Mr. B A Prabhakar
3. Mr. Rajesh Kumar Jogi
4. Ms. Sudha Suresh
9. CSR & 1. Mr. Rajesh Jogi -Chairperson
Sustainability 2. Ms. Rajni Mishra
Committee 3. Ms. Sudha Suresh
4. Ms. Carol Furtado
10. Credit Committee of 1. Ms. Rajni Mishra -Chairperson
Board 2. Mr. B A Prabhakar
3. Ms. Mona Kachhwaha
4. Mr. Ravichandran Venkataraman
5. Mr. Rajesh Jogi
11. Business 1. Ms. Mona Kachhwaha -
Strategy Committee Chairperson
2. Mr. B A Prabhakar
3. Mr. Ravichandran Venkataraman
 4. Ms. Rajni Mishra
5. Mr. Sanjeev Nautiyal
6. Ms. Carol Furtado
12. Transformation and 1. Ms. Rajni Mishra -Chairperson
Optimisation Committee 2. Mr. B A Prabhakar
3. Mr. Rajesh Kumar Jogi
4. Ms. Sudha Suresh

1.5 VISSION, MISSION & QUALITY POLICY:

Vision:

To promote financial inclusion throughout India and become a leading supplier of easily
accessible and reasonably priced banking services for underserved and unserved communities.

It envisions “helping India realise aspirations” by offering comprehensive, customer-centric

financial solutions and building trust and impact in communities

Mission:

“To provide financial services to un-served and under-served customers as a responsible

mass-market bank, focused on building a sustainable tomorrow.”

Quality policy:

Ujjivan Small Finance Bank is committed to maintaining high service standards by

continuously monitoring its operations and ensuring the prompt resolution of customer queries.
The bank actively promotes digital adoption by offering user-friendly self-service options and
mobile banking features, increasing consumers' access to and efficiency in banking. It routinely
collects client input to pinpoint problem areas and raise the standard of overall service. The
bank's emphasis on client happiness and trust is further supported by Ujjivan's well-organised
grievance redressal mechanism, which guarantees that consumer complaints are handled
quickly and sympathetically.

1.6 PRODUCTS/ SERVICES:

1. Accounts: The current and savings accounts created by Ujjivan are suitable to the banking
needs of the clients and are designed to secure the future and maximize the money value.

• Saving account: Ujjivan’s Savings Account requires no minimum balance or opening

deposit and offers 4% annual interest, credited quarterly. It includes free passbook, 25-
 leaf cheque book, unlimited withdrawals, and services like bill
payment and SMS alerts.
• Current account: Ujjivan’s Current Account requires no opening deposit or minimum
balance and offers a free 50-leaf cheque book, passbook, and monthly statements.
It allows free cash deposits up to 15 times the previous month’s average balance, along
with services like bill payments and SMS alerts.
• Minor account: This account is opened jointly with a guardian and has no minimum
balance or deposit requirement. It offers 4% annual interest, free ATM access (Ujjivan
unlimited, 6 other bank transactions), and standard banking facilities like SMS
alerts and NEFT/RTGS.
• Basic Saving Deposit account: Can be opened individually or jointly with no
minimum balance or deposit needed. It offers 4% interest p.a., credited quarterly, with
4 free transactions across all banking channels and NEFT/IMPS services.
• Basic Saving Bank Deposit Small account: No KYC or minimum balance required;
valid for 12 months only. Offers 4% interest p.a., with limits of ₹50,000 balance,
₹10,000 withdrawals, and ₹1,00,000 annual deposits.

2. loans:

• Micro Group Loans: Ujjivan offers collateral-free loans to joint liability groups for
income-generating purposes like business, agriculture, education, and emergencies.
Loan amounts range from ₹5,000 to ₹1,00,000 with tenures of 6 to 36 months.
• Micro Individual Loans: These loans are designed for individuals (not in groups) to
support business, farming, livestock, education, or home improvements. Loan amounts
range from ₹50,000 to ₹3,00,000 with flexible repayment terms and quick disbursal.

• Home Loans & Loans Against Property: Tailored for house construction, purchase,
renovation, or against property value, Ujjivan offers loans from ₹2 lakhs to ₹75 lakhs.
Repayment terms extend up to 20 years with competitive interest rates.
• Two-Wheeler & Vehicle Loans: Financing is available for purchasing new two-
wheelers or electric autos. Loans can go up to ₹2.75 lakhs, covering up to 95% of the
vehicle’s on-road price.
• Gold Loans: Customers can obtain quick short-term loans by pledging gold ornaments.
Loan amounts range from ₹25,000 to ₹25 lakh, offering flexible repayment options and
requiring no guarantors.
 • Business & MSME Loans: Ujjivan provides secured and unsecured business loans for
traders, manufacturers, and service providers. These include working capital,
overdrafts, and loans against property, ranging from ₹1.5 lakhs to ₹2 crores.
• Agriculture and Rural Loans: Loans are offered for farming, poultry, fisheries, and
other rural livelihoods. Products like the Kisan Suvidha Loan support rural income with
ticket sizes starting from ₹60,000 and above.

3.Investment:

• Fixed Deposits: Ujjivan offers Fixed Deposits starting from ₹1,000, with flexible time
ranking from 7 days to 10 years. Interest can be received monthly, quarterly, annually,
or at maturity, with early withdrawal allowed and 0.5% extra interest for senior citizens.
• Recurring Deposits: Recurring Deposits start at just ₹100, with tenures from 6 months
to 10 years and quarterly interest payouts. Premature closure is allowed, and deposits
can be made at any branch regardless of where the account is held; senior citizens
receive 0.5% additional interest.

4. Cards:

• Debit card: Ujjivan provides debit cards with enhanced functionalities tailored to meet
the diverse requirements of its clients.
• Credit card: Ujjivan offers a range of credit cards with appealing rewards, bonuses,
and added benefits tailored to suit various customer preferences.

5. Banking Services:

• Balace Enquiry: account holder can check their balance through passbook updates,
mobile and intranet banking and aslo by contacting with banking direectly.
• Mini Statements: customres can access a mini statement via SMS, mobile banking,
online banking, passbook, and by calling customer care.
• Net Banking: Ujjivan provides internet banking platforms to convenient availability
of an extensive variety of financial services.
1.7 Area of Operation:

Fig 1.2

Source: annual report 2023-24

Ujjivan Small Finances Bank provides a wide operational reach across India, covering 26 states
and union territories and over 326 districts. It serves both urban and rural areas, with a strong
focus on financially excluded and underserved communities. Headquartered in Bengaluru,
Karnataka, the bank also operates through regional offices in cities like Kolkata, Pune, and
Noida. With over 752 banking touchpoints, including branches and ATMs, it ensures access to
banking in remote locations. The bank complements its physical presence with robust digital
services like mobile and internet banking. Its primary customers include low-income
individuals, self-employed persons, and small entrepreneurs. It provides various financial
products such as microloans, housing loans, savings accounts, and fixed deposits.

By providing easily accessible banking services, Ujjivan seeks to empower communities and
advance financial inclusion. The bank provides over 8.9 million customers with round-the-
clock banking help by combining outreach and technology. All things considered, Ujjivan SFB
contributes significantly to the inclusive financial development of India.
Fig 1.3

Source: annual report 2023-24

1.8 INFRASTRUCTURE FACILITY:

1. Extensive Branch Network: Ujjivan Small Finance Bank operates with more than 750
service touchpoints, including branches and customer care centers, across 26 states and union
territories.

2. ATM and Deposit Facilities: To guarantee that clients may conduct cash transactions
swiftly and easily, the bank offers ATMs and cash deposit machines.

3. Biometric and Aadhaar Support: Its branches are equipped with biometric authentication
systems and Aadhaar-enabled services to make banking more secure and accessible.

4. Digital Banking Access: Ujjivan offers mobile and internet banking platforms that allow
customers to manage their finances anytime and from anywhere.

5. Doorstep Banking: In specific locations, the bank offers doorstep services, particularly
aimed at supporting senior citizens and customers with mobility issues.

6. Paperless Loan Process: Ujjivan enables completely digital loan applications, ensuring
faster approval and reducing paperwork.

7. Customer Care Support: It provides 24/7 support through phone banking, SMS alerts, and
dedicated helplines to address customer needs promptly.

8. Regional Language Assistance: The bank delivers services in multiple local languages,
making communication easier for customers across various regions.
1.9 COMPETITORS:

• Equitas Small Finance Bank: Equitas SFB is a major competitor, offering similar
services such as microloans, savings accounts, and financial products aimed at low-
income and underserved communities.
• AU Small Finance Bank: AU SFB is one of the leading players in the small finance
banking sector. It serves clients in both urban and rural areas by offering a wide range
of products, including business, personal, and auto loans..
• Suryoday Small Finance Bank: Suryoday SFB targets the same customer base as
Ujjivan by providing microfinance, savings schemes, and retail banking services to
economically weaker sections.
• Jana Small Finance Bank: Jana SFB offers small loans, housing finance, and deposit
accounts, making it a direct competitor in a field of inclusive banking and financial
services for lower-income groups.
• State Banks of India (SBI): Although a public sector bank, SBI has an extensive rural
network and provides services like small loans and financial inclusion schemes, making
it a key competitor in Ujjivan’s target areas.
• HDFC Bank: HDFC Bank, a major private sector bank, competes with Ujjivan through
its growing focus on rural banking, digital services, and retail loan offerings.
• ICICI Bank: ICICI Bank provides competitive loan products and banking solutions
for small businesses and individuals, overlapping with the market segments that Ujjivan
SFB serves.
• Bandhan Bank: Bandhan Bank began as a microfinance institution like Ujjivan and
now offers full-scale banking services to low-income households, directly competing
in similar sectors.
• Indian Bank: Indian Bank, with its focus on financial inclusion and rural banking
services, competes by offering affordable credit and government-linked banking
schemes.
• Canara Bank: Canara Bank has a strong presence in semi-urban and rural areas and
offers various loan and savings options, positioning itself as a competitor in the
inclusive banking space.
1.10 SWOT ANALYSIS:

1. Strength:

• Strong Customer Trust and Relationship

Through courteous service, efficient loan procedures, and dependable customer
support, this Bank has earned the community’s trust. By offering personalized attention
and ensuring customer satisfaction, the branch has successfully built a loyal clientele
across both rural and urban areas of Sagara taluk.
• Specialization in Microfinance
With a solid foundation in microfinance, Ujjivan SFB has positioned itself as a reliable
provider of small-value loans. The Sagara branch effectively leverages this expertise to
serve women entrepreneurs, small-scale business owners, and self-employed
individuals—segments that are often overlooked by larger commercial banks.
• Comprehensive Product Offerings for Rural Communities
Understanding the unique needs of rural customers, the branch offers a diverse range
of financial products including group loans, individual business loans, two-wheeler
financing, and affordable home loans. These services cater specifically to the financial
requirements of local farmers, small traders, and artisans in and around
the Sagara region.
• Digitally Enabled Banking Services
The bank has adopted advanced banking technologies such as biometric-enabled
ATMs, Aadhaar-based authentication, and mobile banking applications. These tools
empower customers—even those in remote areas—to carry out secure and convenient
digital transactions, ensuring greater accessibility for all user groups, including those
with limited digital literacy.

2. weakness:

• High Dependency on Microloan Portfolio

A significant portion of the Sagara branch’s lending is concentrated in microloans,
which are inherently more vulnerable to default—particularly during periods of
economic instability, such as droughts or crop failures. This overreliance heightens the
branch’s overall credit risk and financial exposure.
 • Low Visibility Among Urban Customers
Although the branch enjoys strong recognition in rural areas, its presence among urban
and salaried individuals within Sagara town remains limited. This lack of visibility
restricts the bank’s ability to attract high-value clients and grow in segments like
premium savings accounts and investment-linked services.
• Lower CASA (Current and Savings Account) Ratio
In comparison to major commercial banks, Ujjivan SFB maintains a relatively low
CASA ratio. Since current and savings accounts are low-cost sources of funds, this
shortfall increases the bank’s average cost of capital and reduces its ability to offer
competitively priced loan products.

3. Opportunity:

• Untapped Potential in Rural Markets:

Several villages in and around Sagara continue to lack access to formal banking
services. Ujjivan SFB has the opportunity to expand its footprint by reaching these
underserved areas through financial literacy programs, self-help group (SHG) lending,
and doorstep banking initiatives.
• Enhancing Digital Banking Adoption:
The branch can actively promote its mobile banking application and UPI-based services
to reduce in-branch congestion and streamline operations. This will also enhance
customer convenience, particularly among younger and digitally inclined users.
• Expansion in Housing and MSME Financing:
As demand for affordable housing and small enterprise funding continues to grow in
tier-3 towns like Sagara, the branch can focus on secured loan segments. This
diversification beyond microfinance will help balance risk and drive long-term growth.
• Leveraging Government Financial Inclusion Schemes:
By integrating offerings with government schemes like PMMY (MUDRA), PMAY,
and DBT, the branch can support financial inclusion and simultaneously increase
customer interaction and branch prominence..

4. Threats:

• Economic Instability Among Rural Customers:

A significant share of the branch’s clientele includes daily wage workers, small-scale
vendors, and farmers whose income is often unstable. Factors such as unpredictable
 weather, market price fluctuations, and health-related issues can disrupt their repayment
capacity, increasing the risk of loan defaults.
• Intensifying Competition from Banks and NBFCs:
Sagara hosts established financial institutions like Local Cooperatives and Regional
Rural Banks and private NBFCs that offer comparable loan services. Increased
competition could pressure Ujjivan SFB to provide more attractive terms or reduced
10
interest rates, which may affect its profitability.
• Regulatory Constraints from the RBI:
The branch’s operational flexibility and pricing policies may be constrained by the
reserve bank of India’s strict regulatory guidelines, especially regarding microfinance
lending limits, capital adequacy requirements, and interest rate caps.
• Reliance on Borrowed Funds:
Due to a relatively low CASA deposit base, the branch depends heavily on external
borrowings and high-cost term deposits to fund its lending operations. Any disruption
in these funding channels could hinder loan disbursement and restrict future expansion.

Ujjivan Small Finance Bank's Sagara branch has made a great name for itself in the community
thanks to its developing digital capabilities, customised financial products for rural customers,
and strong customer trust. Diversifying its loan portfolio, increasing its focus on digital banking
solutions, and fortifying its position among urban and salaried clients are the branch's top
priorities in order to guarantee sustained growth. Long-term stability and success in a changing
financial environment will depend on how well issues like credit risk, market volatility, and
growing competition are managed.

1.11 FUTURE ROWTH AND PROSPECTORS:

1. Robust Credit Growth Outlook:

Ujjivan SFB is projected to achieve over 25% annual credit growth over the next 2–3 years.
This growth is primarily driven by a strategic shift from unsecured microfinance loans to more
secure and stable segments such as:

• Affordable housing loans

• Gold loans

• Two-wheeler and vehicle financing

In addition to lowering credit risk, this diversification guarantees balanced and long-term
portfolio growth.
2. Favorable Regulatory Support:

In June 2025, India’s central bank (RBI) revised the Priority Sector Lending (PSL) norms for
Small Finances Banks (SFBs), reducing the mandatory target from 75% to 60% of Adjusted
Net Bank Credit (ANBC) or Credit Equivalent of Off-Balance Sheet Exposures (CEOBE),
whichever is higher. This reform enabled Ujjivan Small Finances Bank to channel a greater
portion of its resources into low-risk, high-yield lending segments. The relaxation, expected to
release around ₹41,000 crore across the sector, is anticipated to strengthen profitability and
decrease the bank’s reliance on high-risk microlending activities.

3. Enhanced Profitability Metrics:

The bank’s Net Interest Margin remains healthy at around 8.8%, reflecting strong earnings
from its lending activities. Return on Equity (RoE) is anticipated to improve from the current
~12% to 15–16% by FY27, supported by reduced credit costs and greater operational
efficiency. The cost-to-income ratio is also improving, aided by digitalization and economies
of scale.

4. Rural and Digital Outreach:

Ujjivan is strengthening its presence in semi-urban and rural markets by expanding its physical
branch network. Alongside this, it is investing in digital transformation through:

• Mobile and internet banking platforms

• Loan-at-home services

• Collaborations with fintech firms

These initiatives aim to increase customer convenience, reduce operational costs, and attract a
broader, tech-savvy customer base.

5. Aiming for Universal Bank Status:

The bank has submitted an application to the RBI to convert into a universal bank. If granted,
this upgrade will enable Ujjivan to:

• Offer a comprehensive range of services, including current and savings accounts, and
insurance products

• Increase its CASA (Current Account Savings Account) deposits, thereby reducing
funding costs

• Strengthen its market presence and brand credibility

6. Strong Financial Position and Asset Quality:

The Capital Adequacy Ratio (CAR) stands at a healthy ~23%, well above regulatory
requirements. The Liquidity and provisioning levels are robust, with a stable Liquidity
Coverage Ratio (LCR). Non-Performing Asset (NPA) levels have improved, and overall asset
quality remains stable—even in rural markets—reflecting strong risk management practices.
 CHAPTER 2

CONCEPTUAL BACKGROUND AND LITRATURE REVIEW

2.1 THEORITICAL BACKGROUND OF STUDY:

Credit risk is the significant challenges banks face, as it directly impacts asset quality and
financial stability. It refers to the risk that a borrower might be unable to fulfill their repayment
obligations, resulting in potential losses for the lender. Efficient credit risk management plays
a vital role in maintaining the stability of a bank’s loan portfolio, particularly in India’s
competitive and tightly regulated financial sector. Through proactive systems and robust risk
mitigation frameworks, banks can effectively assess, measure, and manage their credit
exposures to minimize potential losses.

Credit Risk is a not only limited to loan defaults but also includes delays in payments,
restructuring of loans, and deterioration of borrower creditworthiness. Hence, modern credit
risk management focuses on end-to-end processes—from pre-sanctioning credit assessments
to post-sanction monitoring and recovery mechanisms. It involves evaluating the borrower's
financial strength, repayment capacity, credit history, and risk profile before extending credit.
Once a loan is disbursed, the bank must closely monitor the borrower’s behavior, repayment
trends, and any warning signals that could indicate stress or potential default.

The Indian Reserve Bank (RBI) provides regulatory guidance to Indian banks by setting clear
standards for asset classification, provisioning requirements, and capital adequacy in line with
Basel III norms. These frameworks aim to ensure that banks hold adequate reserves to absorb
potential credit losses. Moreover, banks must adopt internal risk rating models and credit
scoring systems to distinguish between low-risk and high-risk borrowers. Collectively, these
measures help strengthen the stability of the banking system and encourage sound credit
management practices.

Given its customer base, credit risk management is particularly critical for Ujjivan Small
Finance Bank. The bank was primarily established to promote financial inclusion by serving
underserved and economically weaker sections, especially in rural and semi-urban regions.
Many of its borrowers are first-time credit users with limited or no formal income
documentation or credit history, making careful risk assessment essential.

This makes traditional methods of credit assessment inadequate, requiring the bank to innovate
its approach to risk evaluation.
Given this context, Ujjivan SFB employs a combination of alternative credit appraisal
techniques and technology-driven tools to managed it’s credit risk exposure. These include
field-level verification, personal interviews, cash-flow based assessments, group lending
models, and behavioral scoring methods. The bank also emphasizes frequent customer
interaction and repayment capacity analysis, especially in the microfinance and small business
lending segments. Technology plays a key role, as real-time data tracking, automated alerts for
overdue payments, and centralized risk dashboards help in prompt decision-making.

Moreover, Ujjivan has adopted a structured credit policy, internal control mechanisms, and a
specialized recovery team to ensure timely collections and reduce the incidence of Non-
Performing Assets (NPAs). The bank also practices portfolio diversification across
geographies, customer segments, and loan types to minimize the concentration of risk. In line
with RBI’s prudential norms, Ujjivan maintains adequate provisions for bad loans and ensures
that.

Overall, effective CRM at Ujjivan Small Finances Bank is both a strategic and regulatory
necessity. By adopting a customer-focused yet risk-aware approach, the bank aims to balance
sustainable lending growth with financial inclusion. Its long-term success, particularly in
underserved areas, will depend on maintaining the quality of its credit portfolio through robust
risk management practices as it continues to expand.

MEANING OF CREDIT:

Credit is refered as a financial provision where an individual or institution receives funds,

goods, or services with a commitment to repay at a later date. It is built on the trust that the
borrower will honor the repayment terms, which often include interest payments. In the
banking context, credit forms the foundation of lending operations, allowing people and
companies to honor their financial obligations while contributing to the bank’s earnings
through interest and service fees.

MEANING OF RISK
19
Risk is the potential for adverse outcomes resulting from uncertainty in future events or
decisions. In banking and finance, it represents the chance that There may be a divergence
between expected and actual results, potentially causing financial losses or operational
challenges. Robust risk management is crucial for financial institutions to ensure stability and
sustain profitability.
TYPES OF RISK:

• The Risks of Credit

This is the chance that a borrower won't meet their financial obligations or pay back a
loan. It has an immediate impact on the lender's earnings and financial stability.
• The risk of market
Results from changes in market factors such as foreign currency rates, stock prices, and
interest rates. It can have a big effect on investment value.Operational Risk

• Liquidity Risk
Occurs when an organization is unable to meet its short-term financial obligations
because of a shortage of liquid assets or cash.

13
• Reputational Risk
The risk of losing public trust due to negative publicity, poor customer service, or
controversies, which can affect long-term profitability and customer retention.

• Risk of Interest Rate

Interest rate risk is the term for when a bank's revenue or the value of its assets and
obligations fluctuates dramatically, which can affect overall financial stability. This is
especially true for fixed-income products, which are impacted by fluctuations in interest
rates.

• Foreign’s Exchange Risk

involves possible losses brought on by fluctuations in exchange rates, particularly when
dealing with different currencies.

• Systemic Risk
The possibility of a financial systemic collapse, which is frequently brought on by the
demise of a large financial institution and causes extensive economic upheaval, is
known as systemic risk.
• Strategic Risk
Arises from poor business strategies, flawed decision-making, or failure to a to market
changes, which can hinder long-term goals.
TYPE’S OF CREDIT RISK:

• Default Risk:
This is the possibility that a borrower would totally default on a loan, causing the bank
to suffer a direct financial loss.

• Credit Concentration Risk:

occurs when a bank's sensitivity to losses is increased due to a significant amount of its
loan portfolio being exposed to a single borrower, industry, or geographic area.

• Country Risk (Sovereign Risk):

This kind of risk occurs when a borrower in another nation is unable to make payments
because of political unrest, a collapse in the economy, or modifications to international
laws.

• Settlement Risk:
occurs when one party completes its portion of a financial deal but then fails to deliver
the funds or securities as agreed.

• Downgrade Risk:
This risk is linked to a borrower's credit rating declining, which may result in a drop in
the bank's asset value or necessitate larger capital reserves.

• Counterparty Risk:
Found in trading or derivative transactions, this is the risk that the other party involved
will not fulfill their contractual obligation.

Study on Credit Risk Managements & Its Practices at Ujjivan Small Finance
Bank.

Credit risk the possibility that a borrower won't fulfil their repayment commitments, which
would cost the lender money. Thus, credit risk management, or CRM, is an organised method
for locating, evaluating, tracking, and managing such risks. Its primary goals are:
Minimizing avoidable losses through careful borrower assessment and appropriate pricing.

1. Maintaining portfolio quality by identifying stress at an early stage.

2. Avoiding overexposure by diversifying and setting concentration limits.

3. Ensuring compliance with regulations and maintaining adequate provisions.

An effective CRM framework blends policies (what risks are acceptable), processes (loan
appraisal and monitoring methods), systems (scoring tools and MIS), and governance
(oversight by committees and management).

Institutional Framework at Ujjivan SFB

Ujjivan Small Finance Bank (SFB) has developed a strong risk governance structure to mitigate
credit risk This framework is guided by board-approved policies and supervised by the Risks
Management Committee of the Board (RMCB). The Chief Risk Officer heads the independent
risk function, while business units handle loan origination. Key elements include:

• Defined risk appetite and prudential limits.

• Portfolio monitoring tools and metrics.

• Clear roles for review, escalation, and corrective action.

• Regular reporting and analysis of risk events to strengthen preventive measures.

Branch-Level Practices:

While policies are framed at the institutional level, branches are the frontline in implementing
CRM practices. At Ujjivan’s Sagara branch, these practices include:

• Customer Onboarding & Credit Appraisal: Borrower details are verified through KYC,
income assessment, repayment capacity checks, and purpose validation. Standardized
checklists ensure consistency and compliance with credit policy.

• Use of Scorecards and Automated Rules: Loan applications, particularly in the micro
and retail segments, are processed using scorecards and automated decision systems.
This minimizes subjectivity, improves speed, and ensures uniformity in sanctioning.

• Field Verification and Monitoring: Branch staff, supported by regional teams, conduct
on-site inspections and follow-up visits. These checks are critical in semi-urban areas
like Sagara for validating borrower cash flows and collateral.

• Portfolio Monitoring: Loans are regularly tracked through Portfolio-at-Risk (PAR)

reports, delinquency aging, and threshold triggers. Any breaches are escalated to credit
 control and central risk teams. Branch-level reports are consolidated into the bank’s
MIS for wider monitoring.

• Collections and Restructuring: Early signs of delinquency are addressed through

reminder calls, restructuring (if permitted under policy), or recovery action. The branch
works closely with collections and legal teams in escalated cases.

• Internal Controls and Audits: Branch compliance is reviewed through audits and risk
assessments. Gaps identified are corrected through training, process changes, or revised
scorecards, ensuring continuous improvement.

Implications for Studying the Sagara Branch:

A focused study at the Sagara branch can analyze how policies translate into practice by
examining:

• Loan files and sanction-to-disbursement processes.

• Scorecard outcomes and cases where exceptions were applied.

• Branch PAR reports and delinquency trends.

• Field visit records and recovery measures.

• Audit findings and follow-up actions.

• This provides a more thorough insight of how Ujjivan's governance architecture

handles credit risks local
Conclusion
Credit risks management at Ujjivan SFB integrates governance at the board level with
operational discipline at branch level. At the Sagara branch, this is reflected in structured loan
appraisals, technology-driven decision-making, proactive monitoring, and robust collection
practices. When taken as a whole, these steps guarantee that the bank meets its commercial and
regulatory goals while maintaining asset quality. A study of the Sagara branch highlights how
centralized risk policies are effectively implemented in a semi-urban context, providing a
useful model for academic and professional understanding of CRM in small finance banks.

4.1 loans offerd by the Ujjivan Small Finance Bank:

To satisfy the various demands of its clients, The bank offers an extensive variety of loans to its
customers.These consist of mortgage loans, gold loans, staff loans, education loans, car loans,
housing loans, clean loans, and a number of other financial products. Individual clients are
given access to these resources in order to meet their financial needs.

Below are the loans which are provided by Ujjivan Small Finance Bank

Fig No 4.1

Home loan 8.75%

MSME LOAN 8.75%

L
VEHICAL LOAN 17.5%
O

GROUP LOAN
22.09%

INDUVIDUAL LOAN 23.30%

PM SVANidhi Loans 13%

2.2 Litrature Review:

1. Olaf (2012)

As a component of credit management, Canadian banks aggressively include environmental

concerns into corporate lending. According to a mixed-method study, Export Development
Canada, credit unions, and commercial banks evaluate environmental hazards in order to lower
financial exposure; some even connect sustainability to more general business plans. Given
that Canada’s six largest banks collectively hold over 90% of the country’s assets, consistently
assess environmental risks in loans and mortgages, Canadian banks are ranked "best in class"
when compared to their international counterparts. Even if they take the initiative in this area,
further study is required to quantify the advantages and disadvantages and enhance financial
institutions' reporting on environmental risk management.

2. Hamza (2017)
14
To investigate the effect of credit risk management on the performance of Pakistani commercial
18
banks, this study used secondary data from the State Bank of Pakistan (SBP), the Karachi Stock
Exchange (KSE), and other government sources. Two critical performance factors were
5
assessed using pooled regression analysis. The results show that total bank performance is
negatively impacted by credit risk management. In particular, bank size (SIZE), capital
11
adequacy ratio (CAR), loan-to-asset ratio (LAR), and return on assets (ROA) were positively
impacted, while non-performing loan ratio (NPLR), leverage ratio (LR), and loan loss
provision ratio (LLPR) were negatively impacted. Similarly, CAR, LAR, and SIZE had a
favorable impact on Return on Equity (ROE), whereas LLPR, LR, and NPLR had a negative
one.
3. Hosna (2009)
2
This study examines how four Swedish commercial banks' profitability was affected by credit
risk management between 2000 and 2008. Return on Equity (ROE), which was examined using
a regression model, was utilized as a measure of profitability, while the Non-Performing Loan
Ratio (NPLR) and Capital Adequacy Ratio (CAR) were utilized as credit risk indicators. The
findings show that all banks' profitability is impacted by credit risk management, with NPLR
having a greater impact than CAR. Nevertheless, the impact differs for each bank: Nordea and
SEB display comparable patterns, while Handelsbanken and Swedbank display weaker
connections. The detrimental effect of NPLR on ROE intensifies under Basel II restrictions,
whereas CAR has a somewhat beneficial benefit.
4. Musyoki (2012)

The study looked at how banks' financial performance related to credit risk management
17
metrics such cost per loan asset, default rate, and bad debt provisions. To evaluate profitability
ratios, financial data from ten banks from 2000 to 2006 was examined using regression,
correlation, and descriptive statistics. According to the results, the default rate was the most
important predictor of performance, and every indication that was looked at had a negative
21 2
impact. The study found that banks should implement measures to reduce their exposure to
credit risk while also increasing their competitiveness and profitability.
5. Mwangi (2012)

Using secondary data from 2007 to 2011, this study examined how credit risk management
affected the financial performance of 26 commercial banks in Kenya. Return on Equity (ROE)
was used as a metric for profitability, and the Non-Performing Loan Ratio (NPLR) and Capital
5
Adequacy Ratio (CAR) were used as indications of credit risk. The data was analyzed using
multiple regression analysis (SPSS) using a descriptive study methodology. The findings
demonstrated a significant correlation, with NPLR having a greater negative influence on ROE
15
than CAR. All things considered, the results indicate that bank profitability may be accurately
predicted by credit risk management.
6. Rehman (2019)

This study evaluated credit risk management (CRM) methods in commercial banks in
5
Balochistan, Pakistan, using survey data from 250 workers and multiple regression analysis.
The results showed that the most important factor affecting CRM was corporate governance,
2
followed by diversification, hedging, and the capital adequacy ratio. According to the study's
12
findings, these tactics are necessary for banks to effectively manage and reduce credit risk.
7. Abiola (2024)
7 16
In order to evaluate the effect of Credit Risk Management (CRM) on bank performance, the
study examined the financial reports of seven Nigerian banks between 2005 and 2011. Return
11
on Equity (ROE) and Return on Assets (ROA) were performance metrics, and Non-Performing
Loans (NPL) and the Capital Adequacy Ratio (CAR) were employed as risk indicators.
Effective credit risk management significantly increases bank profitability, according to panel
regression study.
8. Weber (2008)

This essay examines how, during the previous 15 years, European banks have included
environmental issues into credit risk management. Although complete integration across all
stages—rating, costing, pricing, monitoring, and work-out—is advised for successful risk
management, a sector-wide survey reveals that such risks are primarily taken into account
during the rating phase.

9. Gulsan Ara Parvin (2016)

The poor are disproportionately affected by disasters, particularly the urban poor who live in
slums—an estimated 1 billion people worldwide—and are at high danger from natural hazards
and climate change. Even with the implementation of programs like sanitation and slum
renovations by governments, donors, and NGOs, financial support through microfinance is still
scarce because of low creditworthiness perceptions. Nonetheless, research indicates that
microfinance can help communities recover and rebuild livelihoods after a disaster. This
chapter examines the function, availability, and effects of microfinance in disaster risk
reduction and recovery for the urban poor, with a focus on Bangladeshi, Indian, and Indonesian
cities.

10. S. K. Mitra

The poor, who were formerly shut out of regular banks, can now get credit thanks in large part
to microfinance. Lenders are wary, though, because of lack of transparency and information
gaps. MFI ratings aid in resolving these problems. M-CRIL and another agency control the
majority of the rating market in India. This study examines stakeholder feedback and issues
with MFI ratings, compares agencies, and analyses rating algorithms.

11. Girish Nair (2015)

IFC has prioritised client protection since its microfinance ventures in the early 2000s. Through
the Microfinance Credit Reporting Initiative, it started the Responsible Finance program in
2009 with the goal of closing information gaps between lenders and borrowersThe program
helped strengthen the relationship between credit bureaus and microfinance institutions
(MFIs). The SmartLesson lists the most important takeaways from the execution of the
program. It draws attention to the program's beneficial effects on the microfinance industry in
India.
12. thankom Arun (2024)

In 2023, the RBI's Small Finance Banks (SFBs), which were established to increase financial
inclusion, demonstrated robust revenue and profitability growth. Four of the 12 SFBs are listed
on a public exchange, demonstrating the confidence of investors. Leveraging digital initiatives
such as PMJDY, UPI, and Aadhaar, microfinance constitutes 67% of their loan portfolio. The
UK encourages inclusion through microfinance and SME-focused institutions, while lacking a
specialised SFB sector. Fair Finance, Big Issue Invest, and Grameen Bank UK are all
successful instances.

13. kaveri v.s (2021)

Using annual data and a Through a regression model, the research examined the performance
of Small Finance Banks (SFBs) since their inception, with a focus on profitability, asset quality,
and operational efficiency. The results indicate that net non-performing assets (NNPA), cost-
7
to-income ratio (CIR), and non-interest income are key determinants of the analysis revealed
that ROA has a positive relationship with bank size and non-interest income, but a negative
relationship with NNPA and CIR. The study further highlighted challenges, including
declining profitability, low CASA deposits, high reliance on borrowing, and rising bad loans,
and it recommends strategies to tackle these challenges while maintaining the financial stability
and promoting inclusive growth of SFBs.

14. Dr. Pushpa Dewangan (2024)

8
To encourage financial inclusion, the Reserve Bank of India (RBI) created Small Finance
Banks (SFBs) as specialized institutions under the direction of the Indian government.
particularly in rural and semi-urban areas. These banks aim to serve underserved populations,
including micro-industries, small enterprises, farmers, and unorganized sector workers, by
encouraging savings and providing vital banking services including loans and deposits. In a
12
country where millions of people still lack access to basic financial services, SFBs play a vital
role in bridging The inclusion of finances gap and supporting the broader goal of sustainable
and inclusive economic growth.

15. Dr. Kanchan (2021)

The banking sector, having undergone significant transformations in recent years, continues to
6
be a key driver of India’s economic growth. To promote financial inclusion, Small Finance
Banks (SFBs) were founded by the Reserve Bank of India (RBI) to assist marginalized
communities., including microbusinesses and small-scale farmers. Using the CAMEL model,
this study assesses the performance of SFBs from 2017–18 to 2021–22, examining important
8
factors such capital adequacy, asset quality, management effectiveness, earnings quality, and
liquidity. The results demonstrate how important SFBs are to promoting inclusive banking and
bolstering overall economic growth.

16. Deb & Yoyeeta (2025)

The data envelopment analysis (DEA) method is used in this study to investigate banks' scale
efficiency. efficiency of Small Finance Banks (SFBs) in India from 2017 onwards. The findings
indicate that many SFBs operate at sub optimally large scales and may need to reduce their size
to enhance efficiency. Key factors influencing efficiency include inflation, financial inclusion,
and the credit-to-deposit ratio. Based on these insights, the study offers recommendations to
improve operational performance.

17. krishna (2007)

Risk management is crucial as the microfinance sector rapidly changes as MFIs move from
nonprofit organisations to commercial financial institutions. This study examines major risks,
primarily operational, political, and competitive, and suggests ways to reduce them using
Ujjivan, an MFI with headquarters in Bangalore. It draws attention to the ways that political
developments, personnel management, and organisational structure affect MFI operations.
Despite being centred on Ujjivan, the observations are generally relevant to urban MFIs that
adopt the Grameen model.

18. Dr.s.Rosaline Jayant (2021)

Many impoverished people in developing nations like India do not have to formal financial
services and banking facilities frequently become victims of unlicensed moneylenders. To
safeguard these marginalised populations and promote economic expansion, financial inclusion
is crucial. One important step in achieving this objective is the government's and RBI's
establishment of Small Finance Banks (SFBs). The expansion of SFBs and their function in
advancing the development of promoting access to financial services in India are examined in
this paper.

19. Ms. Prasanna Prakash (2021)

India has a variety of banks, but Small Finances Banks (SFBs) are specialized institutions
focused on promoting financial inclusion for underserved populations and small businesses.
SFBs were created by the RBI with the goal of promoting inclusive growth by providing high-
quality financial services to rural communities. This analytical study examines the expansion
and effects of SFBs using secondary data
20. Vaibhav Vitthal (2019)

Microfinance Institutions (MFIs), which serve the financial requirements of the impoverished
who lack collateral for official loans, are crucial to the explore of India's rural economy More
than 223 exist/operate MFIs in India that assist small enterprises, handicrafts, and agriculture.
With 10% of the population owning 55% of the wealth, income inequality is still very high.
Microfinance in India began in 1889 with the founding of Anyonya Co-Operative Bank Ltd.

2.3 RESEARCH GAP:

9
The review of prior research demonstrates that most researchers have focused mainly on credit
risk management in commercial banks, with limited attention given to Small Finance Banks
(SFBs) and Microfinance Institutions (MFIs) in the Indian context. While the link between
credit risk and profitability has been widely studied, the combined role of environmental and
credit risk management in sustainable banking remains largely unexplored. Only a limited
number of comparative studies have been conducted on how SFBs and MFIs contribute to
financial inclusion. Furthermore, there is an absence of recent empirical research evaluating
the post-2020 performance of SFBs under evolving regulatory and economic conditions. The
influence of digital transformation, governance, and organizational structure on profitability
and risk management has not been sufficiently analyzed. Issues related to operational efficiency
and scalability, especially in rural and peri-urban areas are also underrepresented in existing
research. Additionally, the connection between credit risk indicators like NPLR and CAR
supporting long-term sustainable growth is not well established. The significance of financial
inclusion initiatives in enhancing profitability and mitigating risk has also received limited
attention. Therefore, there exists a significant research gap in developing an in-depth, region-
specific study to assess how SFBs and MFIs can balance profitability, risk management, and
inclusive growth effectively in India.
 CHAPTER -3
3
RESEARCH DESIGN

3.1 STATEMENT OF THE PROBLEMS:

Credit risk continues to serve as a major challenge across the banking sector, often leading to
non-performing assets, risky lending, reduced profit margins, and, in extreme cases, capital
erosion that can jeopardize a bank’s survival. This challenge is compounded at Ujjivan Small
Finance Bank due to high administrative costs and limited managerial experience among staff.
Maintaining financial stability necessitates robust credit risk management, including the
ongoing identification, assessment, aggregation, control, and monitoring of credit exposures.
The study seeks to evaluate how effectively Ujjivan SFB’s credit risk management strategies
mitigate associated risks.

3.2 NEED FOR THE STUDY:

Credit risk belongs to the group of most significant challenges faced by banks. The study
intends to investigate the credit risk management practices of Ujjivan Small Finances Bank,
exploring how the bank addresses and manages credit riskIt further assesses the effectiveness
of these practices in mitigating credit-related risks and assesses their impacts on the bank’s
overall performance.

3.3 OJECTIVES OF THE STUDY:

➢ To study & understand the concept of Credit Risk Management & it practices at Ujjivan
Small Finances Bank
➢ To know the Effect of Loan Appraisal process and lending require of Ujjivan Small
Finances Bank.
➢ To investigate the growth of loan session offered by USFB under various scheme.
➢ To know , Relationship of Profitability Level of Credit NPA.

3.4 SCOPE FOR THE STUDY:

9
The focus of this study is includes a comprehensive assessment of Ujjivan Small Finance
Bank’s credit risk management practices over a five-year period. The study primarily focuses
on analyzing loan disbursement and recovery trends, which are key indicators of the bank’s
financial health and stability. Loan disbursement represents the total value of funds sanctioned
and released to borrowers, reflecting the bank’s lending capacity and growth strategy. Effective
management of disbursements is crucial to ensure that credit is extended to reliable borrowers,
 3
thereby minimizing default risks. Similarly, loan recoveries plays a key role in maintaining
liquidity and enabling continuous lending operations. By analyzing both disbursement and
recovery data, the study aims to provide insights into the bank’s overall risk exposure, evaluate
the regulation of its lending policies, and assess the potency of its credit risk management
framework.

3.5 RESEARCH METHODOLOGY:

The research is designed to grounded on data collection from various financial documents, for
example, the bank’s balance sheet, income statement, investor reports, and annual reports. The
research design serves as a structured plan that outlines each stage related to the research
process, guiding the systematic gathering, analyzing, and interpreting of data.

3.6 STATISTICAL TOOLS USED:

➢ Year of Growth and Percentage

➢ Ratio Analysis
➢ Descriptive Analysis
➢ Regression Analysis
➢ Compounded Annual Growth Rate (CAGR)

TOOLS:

MS- Excel

3.7 LIMITATION OF STUDY:

• The study focuses exclusively on Ujjivan Small Finance Bank.

• The data covers a five-year period, which may be insufficient for an in-depth analysis.

• The research primarily relies on secondary data obtained from published annual reports.

• Certain information and data are confidential in nature and therefore could not be
disclosed for review or analysis.
 CHAPTER 4

ANALYSIS AND INTERPRETATIONS

4.1 Analysis of Growth of individual loan by using Year on year analysis:

YOY= NEW VALUE / OLD VALUE *100

1. MICRO BANKING LOAN

Table No: 4.1 Table Showing Y-O-Y Growth and Growth Percentage:

year Loan amount Y-O-Y Growth Growth %

2020-21 10868 0.00%
2021-22 10668 -200 -1.840265
2022-23 5536.83 -5131.17 -48.0987064
2023-24 94600.42 89063.59 1608.56645
2024-25 94600.42 0 0

(source : annual report)

Chart No 4.1: Showing Y-O-Y Growth and Growth Percentage of Micro Loan

MICRO BANKING LOAN

100%

50% 48.09 1608.56

0% 0 0
2020-21 2021-22 2022-23 2023-24 2024-25
-50% -1.84
GRIWTH
-100%

Analysis

The micro-banking loan trend shows high fluctuations across the years. After a small decline
in 2021–22 and a sharp fall in 2022–23, there was a sudden surge in 2023–24 with very high
growth. In 2024–25, the growth became stagnant at 0%.
Interpretation

The pattern indicates instability in loan disbursements, reflecting both risks and opportunities.
The fall in earlier years suggests operational or demand challenges, while the sharp recovery
shows strong lending potential. The stagnation later implies the need for balanced and
sustainable growth strategies.

2. HOUSING LOAN

Table No. 4.2 Showing Y-O-Y Growth and Growth Precentage of housing Loan

Year Loan amont YOY Growth GROWTH %

2020-21 2050 0
2021-22 1064 -986 -48.097561
2022-23 80.23 -983.77 -92.4595865
2023-24 28562.1 28481.87 35500.2742
2024-25 28562.1 0 0
(source: annaul report)

Chart No: 4.2 Showing Y-O-Y Growth and Growth Percentage of Housing Loan

HOUSING LOAN
100%

50% 35500.2742

0% 0 0
2020-21 2021-22 2022-23 2023-24 2024-25

-50% -48.097561 -92.4595865

-100%

Series 1 Column1 Column2

Analysis

The housing loan disbursements show extreme variations during the five-year period. In 2021–
22, loan amounts declined sharply by 48.09%, and in 2022–23, they fell further by 92.46%,
reaching the lowest point. However, in 2023–24, there was an exceptional recovery with loan
disbursements rising to ₹28,562.1, reflecting an extraordinary growth rate of 35,500.27%. In
2024–25, growth remained stagnant at 0%.

Interpretation

The data reflects a highly unstable housing loan trendThe persistent decline during the first two
years indicates weak demand, repayment difficulties, or tighter credit policies. The sudden
surge in 2023–24 indicates aggressive lending or renewed borrower confidence in housing
finance. The stagnation in 2024–25 implies consolidation after rapid growth, highlighting the
need for more consistent and sustainable lending practices.

3. MSME LOAN

Table No: 4.3 Showing Y-O-Y Growth and Growth Precentage of MSME LOAN

Year Loan amount Y-O-Y Growth Growth %

2020-21 73 0
2021-22 1057 984 1347.94521
2022-23 67.72 -989.28 -93.5931883
2023-24 8083.8 8016.08 11837.0939
2024-25 8083.8 0 0
(source: annual report)

Chart No:4.3 Showing Y-O-Y Growth and Growth Percentage of MSME Loan

MSME LOAN
100%

1347.94520547 11837.0939161
50% 9 25

0% 0
2021-22 2022-23 2023-24 2024-25
-50% -93.593188269

-100%

Series 1 Column1 Column2

Analysis

The MSME loan figures show significant fluctuations over the five-year period. In 2020–21,
the loan amount was ₹73 lakh, which surged to ₹1,057 lakh in 2021–22, reflecting a growth of
1347.95%. In 2022–23, it dropped sharply to ₹67.72 lakh, showing a negative growth of -
93.59%. In 2023–24, the loans increased dramatically to ₹8,083.8 lakh, with an outstanding
growth of 11837.09%, and in 2024–25, the loan amount remained steady at ₹8,083.8 lakh,
indicating 0% growth.

Interpretation

The MSME loan trend demonstrates high volatility over the five years. The steep rise and
subsequent fall in disbursements suggest fluctuating credit demand and changing lending
conditions. The strong recovery in 2023–24, followed by stabilization in 2024–25, reflects
improved loan performance while highlighting the significance of consistent credit risk
management and sustainable lending practices.

4. VEHICAL LOAN

Table No: 4.4 Showing Y-O-Y Growth and Growth Percentage of Vehicle loan

Year Loan amount YOY Growth GROWTH %

2020-21 1286 0
2021-22 73 -1213 -94.3234837
2022-23 5.94 -67.06 -91.8630137
2023-24 1616.93 1610.99 27121.0438
2024-25 1616.93 0 0
(source: annual report)

Chart No: 4.4 Showing Y-O-Y Growth and Growth Percentage of Vehical Loan

VEHICAL LOAN
100%

27121.0437710
50% 44

0% 0 0
2020-21 2021-22 2022-23 2023-24 2024-25
-50% -94.32348367 -91.863013699

-100%

Series 1 Column1 Column2

Analysis

The vehicle loan figures over the five years show extreme fluctuations. In 2020–21, the loan
amount was ₹1,286 lakh. It dropped sharply to ₹73 lakh in 2021–22, a decline of -94.32%, and
further fell to ₹5.94 lakh in 2022–23, showing a negative growth of -91.86%. In 2023–24, the
loan amount surged to ₹1,616.93 lakh, an exceptional growth of 27,121.04%, and in 2024–25,
it remained unchanged at ₹1,616.93 lakh, indicating 0% growth.

Interpretation

The vehicle loan trend indicates high volatility over the five-year period. The steep declines in
2021–22 and 2022–23 suggest reduced demand or tighter lending policies, while the sharp
recovery in 2023–24 reflects renewed lending activity. Stabilization in 2024–25 highlights
improved performance, highlighting the significance of ongoing credit monitoring and strong
risk management in vehicle financing.

5. GOLD LOAN

Table No: 4.5 Showing Y-O-Y Growth and Growth Precentage of Gold Loan

Year Loan amount YOY GROWTH %

2020-21 648 0
2021-22 9646 8998 1388.58025
2022-23 656.03 -8989.97 -93.1989426
2023-24 656.03 0 0
2024-25 656.03 0 0
(source: annual Report)

Chart No: 4.5 Showing Y-O-Y Growth and Growth Percentage of Gold Loan

GOLD LOAN
100%

50% 1388.580246914

0% 0 0 0
2020-21 2021-22 2022-23 2023-24 2024-25
-50% -93.198942567

-100%

Series 1 Column1 Column2

Analysis

The gold loan figures over the five-year period show significant fluctuations. In 2020–21, the
loan amount was ₹648 lakh. It increased sharply to ₹9,646 lakh in 2021–22, representing a
growth of 1,388.58%. In 2022–23, it declined steeply to ₹656.03 lakh, showing a negative
growth of -93.20%. In 2023–24 and 2024–25, the loan amount remained constant at ₹656.03
lakh, indicating 0% growth.

Interpretation

The gold loan trend demonstrates high volatility, with a sudden surge in 2021–22 followed by
a sharp decline in 2022–23. The stabilization in 2023–24 and 2024–25 reflects steady
performance, highlighting the need for prudent credit management and sustainable lending
practices to maintain consistent growth in gold loans.

4.2 To know the realtionship between profitability level of credit NPA:

Table No 4.6 Showing the Relationship between profitability level of credit NPA

Years ROA % LEVEL OF CREDIT % NPA %

2024-25 1.7 72.91 0.5
2023-24 3.5 80.77 0.3
2022-23 3.9 84.61 0.04
2021-22 -1.9 82.58 0.6
2020-21 0.04 78.06 2.9
(Source: annual report)

Chart No: 4.6 Showing Profitability Level of Credit NPA

profitability level of credit NPA

80.77 84.61 82.58
90 78.06
72.91
70

50

30
1.7 0.5 3.5 0.3 3.9 0.04 0.6 0.04 2.9
10

-10 2024-25 2023-24 2022-23 2021-22

-1.9 2020-21

ROA % Level of Credit % NPA %

Analysis

The data shows that Ujjivan Small Finance Bank’s profitability, as measured by ROA,
experienced fluctuations over the five-year period. ROA reached a peak of 3.9% in 2022–23
before declining to 1.7% in 2024–25, indicating a reduction in returns on assets. The credit-to-
deposit ratio remained fairly stable, between 72.91% and 84.61%, reflecting consistent lending
activity. Non-Performing Assets (NPA) fell significantly from 2.9% in 2020–21 to 0.04% in
2022–23, before rising slightly to 0.5% in 2024–25, suggesting an overall improvement in asset
quality with a minor recent increase.

Interpretation

The trends indicate that although the bank sustained a healthy level of lending, its profitability
is under pressure, likely due to higher operational costs or lower returns on specific loan
segments. The initial decline in NPAs during 2021–23 reflects effective credit risk
management, while the slight rise in 2024–25 highlights the needs for continued monitoring.
Overall, the data points to strong lending position but underscores the challenge of maintaining
profitability alongside managing credit risk, emphasizing the importance of balancing asset
quality, loan growth, and returns.

4.3 DESCRIPTIVE ANALYSIS:

Descriptive analysis is a method of examining and presenting historical data to provide

meaningful insights. It focuses on identifying patterns, variations, and trends that help in
understanding what has happened in the past. This type of analysis often uses tables, graphs,
and charts to make information clear and easy to interpret. The emphasis is on explaining past
outcomes rather than finding their causes. It acts as a foundation for generating insights and
supports managers and organizations in making informed decisions.

Table No:4.7 showing Discriptive Analysis for 5 years Loans amount

Loan 2020-21 2021-22 2022-23 2023-24 2024-25

MBRB 10868 10668 5536.83 94600.42 94600.42
HL 2050 1064 80.23 28562.1 28562.1
MSME 73 1057 67.72 8083.8 8083.8
VL 1286 73 5.94 1616.93 1616.93
GOLD 648 9646 656.03 656.03 656.03
 Mean SD Median
43254.734 46920.664 10868
12063.686 15077.015 2050
3473.064 4228.2367 1057
919.76 815.21366 1286
2452.418 4021.3361 656.03

Analysis

The descriptive statistics for Ujjivan Small Finance Bank’s loans over five years reveal
significant variation across segments. Micro Banking (MBRB) shows a mean of 43,254.73
characterized by a high standard deviation of 46,920.66, indicating large fluctuations,
particularly resulting from the spike in 2023–24. Housing loans (HL) also display high
variability, with a mean of 12,063.69 and a standard deviation of 15,077.01, reflecting sharp
yearly changes. MSME loans have moderate fluctuations with a mean of 3,473.06 and SD of
4,228.24, while Vehicle loans (VL) remain relatively low and consistent, with a mean of 919.76
and SD of 815.21. Gold loans exhibit low mean values (2,452.42) but high variability (SD
4,021.34), because 2021–22 surge.

Interpretation

The findings indicate that the bank’s lending portfolio is uneven and heavily skewed. The high
standard deviations in Micro Banking, Housing, and Gold loans suggest that growth in these
segments is driven by sporadic spikes rather than consistent performance. Vehicle loans show
relative stability but make a minimal contribution to overall growth. In summary, the data
indicates a volatile lending pattern, with certain segments fueling growth while others remain
stagnant, highlighting the need for a balanced portfolio to ensure stability and sustainable
returns.

4.4 COMPOUNDED ANNUAL GROWTH RATE:

Table No:4.8 showing CAGR for 5 years of loan amount:

Loans 2020-21 2021-22 2022-23 2023-24 2024-25

MBRB 10868 10668 5536.83 94600.42 94600.42
HL 2050 1064 80.23 28562.1 28562.1
MSME 73 1057 67.72 8083.8 8083.8
VL 1286 73 5.94 1616.93 1616.93
GOLD 648 9646 656.03 656.03 656.03
 AVG CAGR Percentage

140593.3 0.541518 54.15

37468.75 0.693586 69.3586

10898.28 1.563649 156.36

3305.256 0.046863 4.6863

11737.27 0.002466 0.2466

Analysis

The CAGR table shows that MSME loans recorded the highest growth at 156%, indicating
aggressive lending in this segment. Micro Banking and Housing loans grew at moderate rates
of 54% and 69%, respectively, reflecting steady expansion. In contrast, Vehicle and Gold loans
had very low CAGRs of 4.69% and 0.25%, suggesting minimal contribution to overall growth.

Interpretation

The findings indicate that Ujjivan Small Finance Bank strategically focuses on high-growth
sectors like MSME, Micro Banking, and Housing, while deprioritizing Vehicle and Gold loans.
The significant differences in growth rates highlight portfolio imbalance and sectoral volatility,
underscoring the essential for effective risk management in order to achieve consistent and
long-term growth.

4.5 REGRESSION ANALYSIS:

One statistical technique used to examine the relationship between a dependent variable (the
desired outcome) and one or more independent variables (potential influencing factors) is
regression analysis.
Calculation of Regression Analysis of Loans amount And Deposite amount:

Years Y X X-X̄ Y-Ȳ (X- X̄ (X- X)²

2020-21 15140 6242 -16406 -7866.8 129062720.8 269156836
2021-22 18162 18292 -4356 -4844.8 21103948.8 18974736
2022-23 24805 25538 2890 1798.2 5196798 8352100
2023-24 24085 25538 2890 1078.2 3115998 8352100
2024-25 32122 37630 14982 9115.2 136563926.4 224460324
295043392 529296096

Calculation of Mean:

X̄

b= ∑(X- X̄)(Y-Ȳ)

∑( X- X)²

= 295043392

529296096

= 0.557426

Calculation of a:

a= Ȳ-b X̄

= 23006.8-(0.557426*22648)

= 10382.22

Analysis

The regression study between gross loans and total deposits produced the equation: with an
of 0.954, highlighting a strong positive relationship. This shows that variations in deposits
explain most of the changes in loans. The slope indicates that as deposits rise, loans also
increase at a proportional rate. Hence, deposit growth clearly emerges as the key factor driving
lending performance.

Interpretation

The findings indicate that Ujjivan Small Finance Bank’s loan growth is strongly linked to its
deposit mobilization efforts. Only a portion of deposits is utilized for lending, with the rest
maintained for liquidity and regulatory compliance. An increasing deposit base allows the bank
to provide more credit while ensuring stability, making deposit mobilization a key strategy for
sustainable loan expansion.
 CHAPTER 05

FINDINGS, CONCULSION AND SUGGESTIONS

5.1 FINDINGS:

1. Micro Banking Loans (MBRB):

The CAGR of Micro Banking loans stood at 54.15%, indicating strong average growth over
the period. However, the data reveals high fluctuations with a decline of -48% in 2022–23
followed by an extraordinary surge of 1608% in 2023–24. The standard deviation of
46,920.66 further highlights instability. This suggests that growth is not consistent, but
largely dependent on sudden spikes in lending.

2. Housing Loans (HL):

Housing loans recorded a CAGR of 69.36%, reflecting long-term expansion. However, the
loan trend was highly erratic, with a contraction of -92.46% in 2022–23 and an exceptional
growth of 35,500% in 2023–24. The standard deviation of 15,077.01 emphasizes high
volatility. Such variations indicate that the growth was unsustainable, driven by external
factors rather than steady demand.

3. MSME Loans:

This segment showed the highest CAGR of 156.36%, marking it as the most aggressive
growth driver for the bank. Year-on-year changes include a sharp increase of 1347% in
2021–22 and an even higher 11,837% in 2023–24. Despite a mean loan value of ₹3,473.06
lakh, the standard deviation of 4,228.23 shows instability. The high growth in MSME loans
reflects the bank’s strategic focus, but it also carries significant risk due to inconsistent
demand patterns.

4. Vehicle Loans (VL):

Vehicle loans displayed a CAGR of only 4.69%, the lowest among all categories. YOY
growth trends show steep contractions of -94% in 2021–22 and -91% in 2022–23, before a
sudden jump of 27,121% in 2023–24. With a mean loan value of ₹919.76 lakh, this segment
contributes very little to the overall portfolio. The data suggests that vehicle loans remain
an underperforming product line, requiring redesign or repositioning.

5. Gold Loans:

Gold loans showed a negligible CAGR of 0.25%, reflecting stagnation. The segment
experienced an initial surge of 1388% in 2021–22, but this was followed by a steep decline
of -93% in 2022–23, and loan amounts stagnated thereafter at ₹656.03 lakh. The standard
deviation of 4,021.34 underlines the volatility in this category. This indicates that gold
loans were not actively pursued as a growth area, limiting their long-term potential.

6. Profitability and Risk Indicators:

Profitability, measured by ROA, peaked at 3.9% in 2022–23 but fell to 1.7% in 2024–25,
suggesting declining efficiency in generating returns from assets. The credit-to-deposit
ratio remained stable between 72–84%, showing steady lending activity. NPAs reduced
significantly from 2.9% in 2020–21 to 0.04% in 2022–23, before slightly rising to 0.5% in
2024–25. This demonstrates strong credit risk management, though recent increases
highlight the need for continued monitoring.

7. Regression Analysis (Loans vs Deposits):

The regression equation (Y = 10382.22 + 0.557X) with an (R^2 \approx 0.95) indicates a
significant positive correlation between deposits and loans. This suggests that loan growth
is largely driven by deposit mobilization, as a larger deposit base directly supports
increased lending while maintaining liquidity and regulatory compliance. Therefore,
expanding deposits serves as a fundamental driver of sustainable lending performance.

5.2 SUGGESTIONS:

1. Balanced Portfolio Strategy:

The bank should aim to balance high-growth yet volatile segments such as MSME,
Housing, and Micro Banking with more stable products like Vehicle and Gold loans. Such
diversification can help lower overall portfolio risk. By maintaining a more even
distribution across loan categories, the bank can avoid overreliance on sudden surges in
specific sectors.

2. Profitability Enhancement:

With ROA showing a declining trend, the bank must strengthen yield management and
improve interest spreads. Adopting digital efficiency measures and Adopting Techniques
for cost optimization can facilitate reduce operational expenses. In the long term, this would
stabilize returns while maintaining competitiveness.

3. Strengthened NPA Management:

Although NPAs fell sharply over the years, the recent uptick to 0.5% in 2024–25 signals
caution. The bank should implement early-warning systems to identify risky accounts and
intensify monitoring of MSME and Housing loans, which display high volatility. Stronger
recovery mechanisms will help maintain asset quality.

4. Deposit Mobilization Initiatives:

Since regression results confirm a strong link between deposits and lending, mobilizing
deposits should be a strategic priority. The bank can introduce attractive fixed deposits,
recurring deposits, and digital savings products to attract urban as well as rural customers.
A stable deposit base will ensure liquidity and sustained credit expansion.

5. Risk Diversification and Innovation:

To lessen reliance on traditional loan products, the bank should explore diversification into
new lending areas such as renewable energy loans, education loans, and digital business
financing. This approach would help distribute risk while targeting emerging customer
segments. Introducing innovative loan products can enhance growth stability and minimize
portfolio volatility.

6. Focus on Sustainable Growth:

Rather than relying on one-time surges in loan disbursement, the bank must work toward
gradual, predictable, and sustainable growth. This can be achieved through strategic
planning, improved credit appraisal processes, and customer-centric product offerings. A
long-term approach will help maintain both profitability and stability.

5.3 CONCLUSION:

The analysis reveals that Ujjivan Small Finance Bank’s loan portfolio has witnessed
significant fluctuations across different segments. While MSME loans recorded the highest
CAGR (156%), reflecting aggressive growth, segments like Gold loans (0.25%) and
Vehicle loans (4.69%) remained stagnant, contributing minimally. Profitability, measured
by ROA, showed a declining trend after 2022–23, raising concerns about sustainability
despite strong credit growth. The fall in NPAs demonstrates effective credit management,
though the recent increase in 2024–25 indicates the need for continued vigilance.

The regression results emphasize that deposit mobilization is a key driver of lending
growth, underlining the importance of maintaining customer trust and stable funding
sources. A strong deposit base directly supports the bank’s lending capacity while ensuring
liquidity and compliance with regulatory requirements.

Overall, the bank exhibits significant growth potential; however, to achieve sustainable
long-term performance, it must balance high-growth but volatile loan segments with more
stable products, maintain asset quality, and optimize profitability. A diversified and well-
managed portfolio will help reduce risk and support consistent, stable growth.
Bibliography:

Books:

[1] Prasanna Chandra (2015). Financial Management. 9th ed. Europe: McGraw Hill HED
[2] Khan Pandey (2018). Financial Management. 5th ed. Vikas Publishing Dehli: Tata
McGraw Hill Publishing Company Limited
[3] LM Pandey (2018). Financial Management. 8th ed. Vikas Publishing House Pvt Ltd.
[4] J Madegowda (2010). Management Accounting. 1st ed. Himalayan Publishing House
Pvt Ltd.

Research Articles & Journals:

[1] APA: Weber, O. (2012). Environmental credit risk management in banks and financial
service institutions. Business Strategy and the Environment, 21(4), 248-263.
[2] APA: Hamza, S. M. (2017). Impact of credit risk management on banks performance:
A case study in Pakistan banks. European Journal of Business and Management, 9(1),
57-64.
[3] APA: Hosna, A., Manzura, B., & Juanjuan, S. (2009). Credit risk management and
profitability in commercial banks in Sweden. rapport nr.: Master Degree Project 2009:
36.
[4] APA: Musyoki, D., & Kadubo, A. S. (2012). The impact of credit risk management on
the financial performance of banks in Kenya for the period. International Journal of
Business and Public Management, 2(2), 72-80.
[5] APA: Mwangi, G. N. (2012). The effect of credit risk management on the financial
performance of commercial banks in Kenya (Doctoral dissertation, University of
Nairobi,).
[6] APA: Rehman, Z. U., Muhammad, N., Sarwar, B., & Raz, M. A. (2019). Impact of risk
management strategies on the credit risk faced by commercial banks of
Balochistan. Financial Innovation, 5(1), 44.
[7] APA: Abiola, I., & Olausi, A. S. (2014). The impact of credit risk management on the
commercial banks performance in Nigeria. International Journal of Management and
sustainability, 3(5), 295-306.
[8] APA: Weber, O., Fenchel, M., & Scholz, R. W. (2008). Empirical analysis of the
integration of environmental risks into the credit risk management process of European
banks. Business Strategy and the Environment, 17(3), 149-159.
 [9] APA: Parvin, G. A., Shaw, R., & Shumi, K. F. (2016). Urban disasters and
microfinancing. In Urban Disasters and Resilience in Asia (pp. 141-159). Butterworth-
Heinemann.
[10] APA: Mitra, S. K., Ranjan, R., Negi, S., Malekar, S., Mohanty, R. P., Rajput, A., ...
& Abani, A. S. XIMB JOURNAL OF MANAGEMENT.

Websites:

[1] https://www.ujjivansfb.bank.in/static/branches/kalmane-sagara-contact-address-ifsc-
code.html
[2] https://www.federalbank.co.in/
[3] https://www.ujjivansfb.bank.in/static/annual-reports/index.html
[4] https://www.ujjivansfb.bank.in/static/annual-reports/2024-25/index.html
ANNEXURE:

BALANCESHEET:

Balance Sheet of Ujjivan 31/3/2025 31/3/2025 31/3/2023 31/3/2022 31/3/2021

Small Finance Bank (in
Rs. Cr.)
EQUITY AND
LIABILITY
SHARE HOLDERS
FUND:
Equity share capital 1935 1931.43 1954.71 1728.31 1728.31
total share capital 1935 1931.43 2154.71 1928.31 1928.31
Revaluation Reserve 0 0 0 0 0
Reserves and Surpluse 4058.8 3609.74 2003.18 832.12 1246.71
Total Reserves and 4058.8 3609.74 2003.18 832.12 1246.71
Surpluse
Total Share Holders Fund 6083.4 5613.49 4209.11 2802.63 3218.75
Deposits 37630 31462.16 25537.68 18292.22 13135.77
Borrowings 2845.4 2170.82 2641.46 1763.56 3247.32
Other Liabilities and 1129.9 1175.75 928.62 746.05 778.62
Provisions
Total Capital and 47689 40422.22 33316.88 23604.46 20380.45
Liabilities
ASSETS
Cash and balance with 3133.4 2518.31 2305.27 1682.25 1711.53
Reserve bank of India
Balances with Banks 36.43 18.48 178.32 485.85 865.97
Money at Call and Short
Notice
Investments 11730 9766.02 8510.31 4152.93 2516.45
Advances 31390 26882.92 21289.66 16303.17 14493.95
Fixed Assests 456.91 426.66 282.88 249.39 280.73
Other Assests 942.45 809.82 750.44 730.87 511.83
Total Assests 47689 40422.22 33316.88 23604.46 20380.45
PROFIT AND LOSS ACCOUNT:
Standalone Profit & Loss Mar 25 Mar 24 Mar 23 Mar 22 Mar 23
account
In crs.
INCOME
Interest/ Discount on Advances/ 5525.7 4973.01 3707.77 2575.78 2600.38
Bills
Income from Investements 805.83 678.62 410.83 185.14 172.98
Interset on Balance with RBI and 10.96 10.56 18.06 51.88 32.71
other Inter bank funds
Others 11.9 14.97 28.34 0 0
Total Inerest Earned 6354.39 5677.15 4164.99 2812.8 2806.07
Other Income 846.2 786.75 589.19 313.27 310.82
Total Income 7200.59 6463.91 4754.19 3126.07 3116.89
EXPENDITURE
Interset Expanded 2718.12 2267.7 1467.09 1039.21 1077.51
Payments to and Empoloyes 1499.49 1183.18 920.25 812.6 748.78
Depriciation 134.72 98.29 90.28 80.44 76.8
Operating Expenses (excluded 1159.02 997.63 791.53 603.34 404.5
EmployeseCcost & Depriciation)
Total Operating Expenses 2793.24 2279.1 1802.06 1496.38 1230.08
Provision Towards Income Tax 200.89 404.68 292.07 0 1.73
Provision Towards Deffered Tax 14.57 15.99 75.25 -135.77 0.17
Other provisions and 747.66 214.94 17.8 1140.84 799.1
Contingencies
Total Provisions and 963.12 635.61 385.11 1005.08 801
Contingencies
Total Expenditure 6474.48 5182.42 3654.26 3540.66 3108.59
Net Profit/ Loss for the Year 726.1 1281.49 1099.92 -414.59 8.3
Net Profit/ Loss after EI & Prior 726.1 1281.49 1099.92 -414.59 8.3
Year Items
Profit/ Loss Brought Forward 1818.4 506.87 -72.35 343.62 362.01
Total Profit /Loss Available for 2544.5 1788.36 1027.57 -70.97 370.31
Appropriations
APPROPRIATIONS
Transfer To/ From Statutory 181.53 320.37 274.98 0 2.07
Reserve
Transfer To/ From Special 21 17 30 0 0
Reserve
Transfer To/ From Capital Reserve 12.1 0 0 1.39 19.33
Transfer To/ From Investment 7.1 4.37 47.13 0 5.28
Reserve
Equity Share Dividend 290.08 68.34 146.59 0 0
Preference Share Dividend 0 0 22 0 0
Balance Carried Over To Banace 2032.71 1378.27 506.87 -72.35 343.62
Sheet
Total Appropriations 2544.5 1788.36 1027.57 -70.97 370.31
OTHER INFROMATION
EARNING PER SHARE
Basic EPS (Rs) 3.75 6.65 5.82 -2.4 0.05
Diluted EPS (Rs) 3.71 6.54 5.81 -2.4 0.05
DIVIDEND PERCENTAGE
Equity Dividend Rate (%) 15 15 13 0 0