Indian fintech startup Slice has accomplished its merger with North East Small Finance Bank, marking a uncommon occasion of a startup efficiently coming into India’s tightly regulated banking sector.
The merger, first proposed final 12 months, transforms the Bengaluru-based startup right into a banking entity, following months of regulatory scrutiny that has reshaped India’s fintech panorama.
Slice, which beforehand gained prominence by issuing credit score card-like merchandise, will preserve its current digital cost and lending providers whereas increasing into conventional banking choices together with financial savings accounts and funding merchandise, based on an electronic mail despatched to prospects on Sunday.
Banking licenses have proved elusive in India, the place the central financial institution has rejected most functions lately. The Reserve Bank of India’s wariness stems from its expertise with failed banks within the 1990s and governance lapses at Yes Bank and PMC Bank previously decade.
While India has produced dozens of fintech unicorns, most should accomplice with conventional banks to supply fundamental providers, making them weak to regulatory adjustments and accomplice banks’ shifting priorities. This would clarify why so many startups and enterprise companies are aggressively scrambling for a financial institution play in India, as TechCrunch has beforehand reported. Fintech Jupiter is in superior phases of talks to amass a stake within the India unit of SBM Bank, TechCrunch just lately reported.
The financial institution merger provides Slice — which counts Tiger Global, Insight Partners and Blume Ventures amongst its backers — entry to capital at decrease value and direct management over its lending operations. It may also enable Slice to launch and iterate merchandise sooner. Slice was valued at round $1.5 billion on the time of merger announcement final 12 months.
“For over a year, the teams at Slice and NESFB have worked tirelessly to make this merger a reality,” stated Rajan Bajaj, founder and chief government of Slice, in an announcement. “Today, we’re thrilled to be at the starting line of building India’s most loved bank,” added Bajaj, who will serve the function of government director on the merged entity.
NESFB, established in 2016 as a subsidiary of RGVN Microfinance, has targeted on serving prospects in India’s northeastern area and counts Pi Ventures, Bajaj Group, and SIDBI Venture Capital amongst its traders.
