Indian fintech Slice closes bank integration

Indian fintech startup Slice has completed its merger with North East Small Finance Bank, marking a rare example of a successful startup entering India’s heavily regulated banking sector.
The merger, first proposed last year, turns the Bengaluru-based startup into a banking entity, following months of regulatory scrutiny that has reshaped India’s fintech landscape.
Piece, which previously gained prominence by issuing credit card-like products, will maintain its existing digital payment and lending services while expanding into traditional banking offerings including savings accounts and investment products, according to an email sent to clients on Sunday.
Banking licenses have proven difficult in India, where the central bank has rejected many applications in recent years. The Reserve Bank of India is wary of its experience with failed banks in the 1990s and governance lapses at Yes Bank and PMC Bank over the past decade.
While India has produced a number of fintech unicorns, most have to partner with traditional banks to provide basic services, making them vulnerable to regulatory changes and changing priorities for partner banks. This could explain why so many firms and businesses want to play in banking 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 reported recently.
The bank merger gives Slice — which counts Tiger Global, Insight Partners and Blume Ventures among its backers — access to capital at lower costs and direct control of its lending operations. And it can allow a piece to start and multiply products quickly. The piece was valued at about $1.5 billion when the merger was announced last year.
“For more than a year, the Slice and NESFB teams have worked tirelessly to make this merger a reality,” Rajan Bajaj, Slice’s co-founder and CEO, said in a statement. “Today, we are very happy to be at the forefront of building the most popular bank in India.”
NESFB, founded in 2016 as a subsidiary of RGVN Microfinance, focuses on serving clients in the northeast region of India and counts Pi Ventures, Bajaj Group, and SIDBI Venture Capital among its investors.
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