In a rare feat, Indian fintech startup Slice has successfully merged with North East Small Finance Bank, gaining a coveted banking license in the tightly regulated Indian banking sector. This merger marks a significant milestone for the Bengaluru-based startup, which will now expand its services to include traditional banking offerings such as savings accounts and investment products.

Slice, previously known for its credit card-like products, will maintain its digital payment and lending services while enjoying greater control over its lending operations and access to capital at a lower cost. The startup, backed by investors including Tiger Global, Insight Partners, and Blume Ventures, was valued at around $1.5 billion at the time of the merger announcement last year.

The merger is a significant achievement in India's fintech landscape, where banking licenses are notoriously difficult to obtain. The Reserve Bank of India has rejected most applications in recent years, citing concerns over governance and failed banks in the past. Slice's success is likely to inspire other fintech startups to pursue banking licenses, as they seek to gain greater control over their operations and offer a wider range of services to customers.

With this merger, Slice's founder and CEO Rajan Bajaj aims to build "India's most loved bank," leveraging the startup's digital expertise and the bank's regional presence to create a unique financial services entity. The deal is also a testament to the growing trend of fintech startups seeking banking licenses to expand their offerings and reduce their dependence on traditional banks.