The archive · Money & Fintech · Financial decision · 2018–2025
Navi's UPI-and-lending bet hits an RBI ban: Bansal quits as CEO, app stays profitable
Flipkart founder Sachin Bansal self-funded Navi to crack UPI's duopoly with cashbacks and loans; RBI's Oct 2024 pricing ban pushed him out of the CEO seat.
Navi (Navi Technologies / Navi Finserv)
What the business is
A vertically integrated fintech: UPI payments, personal, vehicle and home loans, insurance, mutual funds and digital gold on one app, with loans manufactured by its own NBFC rather than brokered.
How it started
After leaving Flipkart, Sachin Bansal co-founded Navi in 2018 in Bengaluru with Ankit Agarwal, funding the company largely himself. His bet was that India's payments and credit markets were big enough for a new full-stack player that owned its lending, insurance and UPI rails instead of distributing other firms' products.
What happened
Navi launched instant personal loans, home and vehicle loans, and built out UPI, bill payments, insurance, digital gold and mutual funds. From April 2024 it added cashbacks on UPI; monthly transactions jumped from 3M in March to 89M in August 2024, moving it from 27th to 5th among UPI apps — still only 0.6% market share against PhonePe's 48% and Google Pay's 37%. On October 17, 2024, RBI barred Navi Finserv and three other NBFCs from sanctioning and disbursing new loans from October 21, citing excessive weighted-average lending rates and interest spreads; restrictions were lifted on December 2, 2024 after remedial action.
How it ended up
In February 2025 Bansal stepped down as CEO of both Navi Technologies and Navi Finserv to become executive chairman. The group reported a ₹130 Cr profit after tax on ₹2,614 Cr total income in H1 FY25, and the UPI app stayed in the top tier — but the founder-led sprint was over.
Background
Navi is the fintech Sachin Bansal built after selling Flipkart to Walmart: a Bengaluru company, founded in 2018 with Ankit Agarwal and largely self-funded, that aimed to be a full-stack financial services group — its own NBFC for lending, its own general insurer, its own UPI app, plus mutual funds and digital gold, so that it manufactured products rather than resold others'.
The bet was that India's UPI market — locked at the top by PhonePe (about 48% share) and Google Pay (about 37%) — and its fast-growing digital lending market could still be cracked by a newcomer with cheap self-underwritten loans and cashback-funded growth. From April 2024 Navi paid cashbacks on UPI transactions; volume grew 30x in six months, from 3M transactions in March to 89M in August, lifting it from 27th to 5th among UPI apps. But 89M transactions was still just 0.6% of the market.
The constraint came from the regulator, not the market. On October 17, 2024, RBI barred Navi Finserv — along with DMI Finance, Asirvad Micro Finance and Arohan Financial Services — from sanctioning and disbursing new loans effective October 21, citing weighted-average lending rates and interest spreads over funding costs that were excessive and non-compliant. Existing customers could still be serviced, and RBI lifted the restrictions on December 2, 2024 after remedial action.
In February 2025 Bansal stepped down as CEO of Navi Technologies and Navi Finserv to become executive chairman, handing day-to-day control to two long-serving executives. The group reported a ₹130 Cr profit after tax on ₹2,614 Cr total income in H1 FY25 — the business kept running, but the regulatory ceiling on its pricing had become the defining fact of the company.
What has to be true
- UPI's real structure defeated the wedge: 85% of transactions sat with PhonePe and Google Pay, so a 30x growth spurt still left Navi at 0.6% share.
- Lending was the economic engine, and its pricing was the one thing Navi did not control — RBI banned the rate card itself in October 2024.
- The ban forced compliance work before any further growth, and the founder's exit from the CEO role showed the regulator, not competition, had become the company's binding constraint.
- Self-funding bought independence from VCs but not immunity: capital could not buy regulatory approval or a meaningful share of a two-player UPI market.
What can be applied
When growth is bought with a product whose price a regulator can ban, the engine is borrowed, not owned: the durable asset is distribution and data, not a rate card the central bank can reprice.
Aftermath
As of February 13, 2025, Navi was still live and profitable: Navi Technologies reported ₹130 Cr profit after tax on ₹2,614 Cr total income in H1 FY25, and its UPI app ranked in the top five. Bansal remained executive chairman, focusing on strategy and compliance, while Rajiv Naresh led Navi Technologies and Abhishek Dwivedi led Navi Finserv. The RBI restrictions imposed on October 17, 2024 were lifted on December 2, 2024, but the growth story was no longer founder-driven: the open question was whether a compliant, well-priced NBFC could keep the app's economics intact.
Sources
- Sachin Bansal's Navi overtakes Amazon Pay to emerge as fifth largest UPI player
- RBI bars Sachin Bansal's Navi Finserv, DMI Finance, two other NBFCs from loan sanction, disbursal effective from Oct 21
- Navi's Sachin Bansal Steps Down From CEO Role
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