Indian fintech unicorn Slice has received approval from the central bank to merge with North East Small Finance Bank, marking a significant achievement in an industry where such mergers are rare. Slice, known for offering credit card-like services and previously issuing over 400,000 cards per month, sees this merger as an opportunity to expand its mission of providing essential banking services to underserved consumers.

This merger comes after Slice acquired a 10% stake in the Guwahati-based bank in recent quarters. Industry experts believe that the combined entity will enhance its product offerings and accelerate product development.

Last year, the Reserve Bank of India introduced several guidelines that impacted fintech startups, including Slice, creating challenges in the card issuance sector. Despite these challenges, Slice’s founder and CEO, Rajan Bajaj, expressed gratitude for the RBI’s trust and highlighted the company’s commitment to customers and robust risk management.

Slice, valued at approximately $1.5 billion in its previous funding round, has garnered support from investors like Tiger Global, Insight Partners, Blume Ventures, and EMVC. The initial investment in North East Small Finance Bank valued the lender at about $68 million.

It’s worth noting that investors are already in discussions to invest around $125 million in the merged entity. This merger represents a significant development in India’s fintech landscape, with the potential to revolutionize digital-first banking for the country’s vast smartphone user base.

North East Small Finance Bank, established in 2016, primarily serves customers in the northeastern region of India. It has received support from Pi Ventures, Bajaj Group, and government-backed SIDBI Venture Capital.

While banking-fintech collaborations are becoming more common in India, obtaining a banking license or merging with a bank remains unusual, given increased regulatory oversight. The central bank has been cautious in granting such licenses, rejecting many applications, even from tech giants.

Slice, which has held an NBFC (Non-Banking Financial Company) license for about five years, stands out in terms of its capital adequacy ratio and annualized revenue, which is over $100 million.

The merger with North East Small Finance Bank represents a promising expansion of services and a commitment to inclusive and responsible banking, according to Rupali Kalita, Managing Director and Chief Executive of NESFB. This collaboration seeks to deliver accessible and exceptional financial services to a wider audience.