The archive · Money & Fintech · Strategic decision · 2016–2024
Slice's card-for-the-unbanked bet survives an RBI ban by merging into a small finance bank
India's Slice bet young people without credit histories would use card-like credit; after RBI banned it, it merged with a bank.
Slice
What the business is
Slice issued card-like credit products and UPI payments to young Indians, then became a shareholder-run small finance bank through a 2024 merger.
Starting capital：Raised a $50M Series C led by Tiger Global in June 2022 at a $1.5B+ valuation; earlier rounds plus later funding pushed total raised well past $200M.
How it started
Founder Rajan Bajaj built Slice to serve Indians that credit bureaus had almost no data on. By mid-2022 the app claimed over 12 million users and was issuing 300,000–400,000 cards a month, one of the highest volumes in India.
What happened
In June 2022 the RBI barred fintechs from loading credit lines into prepaid instruments, killing Slice's core model overnight. Slice reworked cards into per-transaction loans, then bought 10% of North East Small Finance Bank and in October 2023 won rare RBI approval to merge with it. NCLT and other approvals followed through 2024.
How it ended up
The merger closed effective 27 October 2024, folding Slice's operations, assets and brand into NESFB — making the fintech a bank, an outcome only a handful of Indian startups have achieved.
Background
Slice was founded in 2016 as a BNPL tool, then relaunched around a 2019 consumer card aimed at young Indians with little or no credit history — a group India's banks had largely ignored. By June 2022 it claimed 12 million users and was issuing up to 400,000 cards a month, backed by Tiger Global at a valuation above $1.5 billion.
The model was a pre-approved credit line loaded onto a prepaid card. In mid-2022 the Reserve Bank of India banned exactly that structure, forcing Slice to convert every transaction into a freshly underwritten loan and then to hunt for a permanently legal chassis.
Slice found it by buying into North East Small Finance Bank, a tiny lender serving India's northeast, and winning RBI approval to merge. The deal closed on 27 October 2024, turning the fintech into the bank itself — a first-of-its-kind outcome in Indian fintech and a complete answer to the 2022 ban.
What has to be true
- The credit-line-on-card structure sat in a regulatory grey zone that the RBI deliberately closed.
- Instead of shutting down, Slice used its scale and valuation to buy its way into a licensed bank.
- A tiny regional bank gained a fintech's distribution, and the fintech gained a regulatory moat.
- The merger took two years of approvals — regulation, not competition, was the real gatekeeper.
What can be applied
When the regulator defines the perimeter, a lending model that depends on a loophole is a lease, not an asset; the winning response was to move inside the regulated tent rather than fight the ban.
Aftermath
As of September 2026 the merged NESFB operates Slice's consumer lending and payments business under a banking licence, with founder Rajan Bajaj serving as an executive director. The deal gave Slice what rivals like Uni and Jupiter never got: a regulated way to keep lending to the underserved segment it was built for.
Sources
- Indian fintech Slice tops $1.5 billion valuation in new funding
- Slice will now lend like its BNPL peers through its card to adhere to RBI directive
- Indian fintech unicorn Slice secures rare approval to merge with bank
- Slice completes merger with North East Small Finance Bank
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