Key Points
- Slice merges with North East Small Finance Bank.
- The merger lets Slice enter the banking sector.
- Slice will provide savings accounts and investment products.
- It’s hard to get banking licenses in India due to strict regulations.
- Slice was valued at around $1.5 billion before the merger.
- Founder Rajan Bajaj is committed to creating a customer-friendly bank.
Looma News
Indian fintech startup Slice has completed its merger with North East Small Finance Bank, marking a rare success for a startup entering India’s tightly controlled banking industry. Proposed last year, the merger faced heavy regulatory checks and changes the Bengaluru-based startup into a banking entity.
Slice, known for its credit card-like products, will keep its digital payment and lending services while branching into traditional banking. This includes savings accounts and investment products, as shared in a recent email to customers.
In India, getting banking licenses is tough. The Reserve Bank of India has turned down most recent applications due to worries about past banking issues with companies like Yes Bank and PMC Bank. While many fintech companies have emerged, they often rely on traditional banks for services, making them sensitive to regulatory changes and shifts in partnerships.
Startups and investors are keen on banking opportunities. For example, Jupiter is in talks to buy a stake in SBM Bank’s Indian branch. Slice’s merger gives it access to cheaper capital and more control over its lending operations.
Slice has notable investors, including Tiger Global, Insight Partners, and Blume Ventures, and was valued at about $1.5 billion when the merger was announced last year. Founder and CEO Rajan Bajaj expressed excitement about the merger, saying, “For over a year, the teams at Slice and NESFB have worked hard to make this merger happen. Today, we’re excited to start building India’s favorite bank.”
North East Small Finance Bank, founded in 2016 as a branch of RGVN Microfinance, aims to serve customers in India’s northeastern area. The bank has attracted investments from companies like Pi Ventures, Bajaj Group, and SIDBI Venture Capital.
