Utkarsh Small Finance Bank has announced its Q3FY26 financial results, revealing a significantly widened net loss alongside declining loan portfolio performance. The bank faced substantial challenges during the quarter, with market disruptions in the microfinance segment impacting overall business operations and profitability.

Financial Performance Overview

The bank's Q3FY26 results demonstrate continued financial stress with deteriorating bottom-line performance. Net loss expanded substantially to ₹3.75 billion compared to ₹1.68 billion in the corresponding quarter of the previous year. Total income declined year-on-year while operational challenges persisted across key business segments.

Loan Portfolio and Asset Quality

The bank's gross loan portfolio declined to ₹18,306 crore as of December 31, 2025, representing a 3.9% year-on-year decrease from ₹19,057 crore. The Joint Liability Group (JLG) portfolio, including BC JLG, experienced a significant contraction of 34.1% to ₹6,419 crore, while the Non-JLG portfolio grew by 27.5% to ₹11,888 crore.

Deposit Growth and Funding Mix

Despite operational challenges, the bank achieved modest deposit growth of 4.5% year-on-year, with total deposits reaching ₹21,087 crore. CASA deposits grew by 16.1% to ₹4,611 crore, while retail term deposits increased substantially by 23.8% to ₹12,586 crore. The CASA ratio improved to 21.9% from 19.7% in the previous year.

Operational Challenges and Provisions

Operating expenses increased to ₹473 crore in Q3FY26 from ₹400 crore in Q3FY25, representing an 18.19% year-on-year growth. Personnel costs rose to ₹246 crore from ₹225 crore, while other operating expenses increased significantly. Total provisions for the quarter stood at ₹446 crore compared to ₹423 crore in the corresponding period last year.

The bank's results reflect the impact of market disruptions in the microfinance segment, with management focusing on strengthening collection efforts and improving asset quality metrics. Despite the challenging operating environment, the bank maintained a robust capital adequacy ratio of 20.11% and continued expanding its retail deposit franchise.

Utkarsh Small Finance Bank has issued a comprehensive postal ballot notice dated January 28, 2026, seeking shareholder approval for three critical business resolutions through electronic voting. The bank has engaged KFin Technologies Limited as the service provider to facilitate the e-voting process for all eligible shareholders.

Key Resolutions for Shareholder Approval

The postal ballot encompasses three significant resolutions that require shareholder consent:

E-Voting Schedule and Process

The electronic voting process has been structured to ensure maximum shareholder participation. The e-voting period will commence on Friday, January 30, 2026 at 9:00 AM (IST) and conclude on Saturday, February 28, 2026 at 5:00 PM (IST). KFin Technologies Limited will disable the e-voting module immediately after the deadline.

Shareholders whose names appear in the Register of Members or Register of Beneficial Owners maintained by NSDL and CDSL as on Friday, January 23, 2026 (cut-off date) are eligible to participate in the voting process. The postal ballot notice is being sent electronically to all members whose email addresses are registered with the depositories.

Director Appointments and Qualifications

Dr. Ram Jass Yadav - New Appointment

Dr. Ram Jass Yadav, aged 61 years, brings over 40 years of diversified banking experience across retail, corporate, treasury, credit, risk management, compliance, and governance. He holds qualifications including Ph.D in Banking and Finance, M.Com, CAIIB, MBA, FCMA and Company Secretary certification. His appointment as Additional Director took effect from January 03, 2026, and the proposed term extends from January 03, 2026 to January 02, 2031.

Mr. Ajay Kumar Kapur - Re-appointment

Mr. Ajay Kumar Kapur, aged 66 years, currently serves as Independent Director and is proposed for re-appointment for a second term of 3 consecutive years from March 02, 2026 to March 01, 2029. He holds a Bachelor of Engineering degree and has previously been associated with Punjab Tractors Limited, Industrial Development Bank of India, and SIDBI. During FY 2024-25, he received sitting fees of ₹33.40 lakh and fixed remuneration of ₹9.00 lakh.

CEO Remuneration Approval

The bank seeks approval for Mr. Govind Singh's remuneration as Managing Director & CEO for FY 2025-26. The proposed remuneration structure includes:

Mr. Govind Singh, aged 60 years, holds 1101390 equity shares in his personal capacity and has attended all 10 Board meetings during the current period.

Compliance and Regulatory Framework

The postal ballot process complies with Section 110 of the Companies Act, 2013, SEBI Listing Regulations, and applicable RBI guidelines. The bank has appointed Mr. Avinash Bagul (FCS:5578, COP:19862) and alternatively Mr. K Venkataraman (ACS:8897, COP:12459) of BNP & Associates as Scrutinizers to ensure fair and transparent voting.

The results will be announced within two working days of the e-voting conclusion, on or before March 03, 2026. The results will be made available on the bank's website, stock exchange platforms, and KFin's e-voting portal, ensuring complete transparency for all stakeholders.