Indian fintech startup Slice has completed its merger with North East Small Finance Bank, marking a rare case of a startup successfully entering India's tightly regulated banking sector.
The merger, first proposed last year, transforms the Bengaluru-based startup into a banking entity, following months of regulatory scrutiny that has reshaped India's fintech landscape.
Slice, which previously gained prominence by issuing credit card-like products, will maintain its existing digital payments and lending services while expanding into traditional banking offerings including savings accounts and investment products, according to an email sent to customers. customers on Sunday.
Banking licenses have proven difficult to obtain in India, where the central bank has rejected most applications in recent years. The Reserve Bank of India's caution stems from its experience with failed banks in the 1990s and governance failures at Sure Bank and PMC Bank in the last decade.
While India has produced dozens of fintech unicorns, most must partner with traditional banks to offer basic services, making them desvalido to regulatory changes and the changing priorities of partner banks. This would explain why so many startups and venture firms are aggressively fighting for a banking bet in India, as TechCrunch previously reported. Fintech Jupiter is in advanced stages of talks to acquire a stake in SBM Bank's Indian unit, TechCrunch recently reported.
The bank merger gives Slice – which counts Tiger International, Perception Companions and Blume Ventures among its backers – access to lower-cost caudal and direct management over its lending operations. It can also allow Slice to launch and iterate products faster. Slice was valued at about $1.5 billion at the time of the merger announcement last year.
“For more than a year, the Slice and NESFB teams have worked tirelessly to make this merger a reality,” Rajan Bajaj, founder and CEO of Slice, said in a statement. “Today we are delighted to be at the starting line of building India’s most loved bank.”
NESFB, established in 2016 as a subsidiary of RGVN Microfinance, has focused on serving clients in the northeast region of India and counts Pi Ventures, Bajaj Group and SIDBI Enterprise Caudal among its investors.
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