Slice & North Eastern Small Finance Bank Merger: Will the Marriage of Two Unsuccessful Companies be Successful?
Code : MAA0231 |
Region : Asia |
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INTRODUCTION: In October 2023, Slice, a fintech company, obtained permission from the Reserve Bank of India (RBI), India’s central bank, to merge with North Eastern Small Finance Bank (NESFB). The regulator allowing a fintech company to merge with a Small Finance Bank (SFB) came as a surprise to many. According to Satish Kumar Kalra (Kalra), then interim MD and CEO, NESFB, “This is a unique opportunity to be at the helm of what is poised to be a groundbreaking merger in the banking industry — a cross-cultural collaboration between two entities set to redefine the financial landscape by leveraging NESFB’s grassroots banking and Slice’s digital prowess. I’m looking forward to guiding NESFB through this transformative phase.”.. BACKGROUND NOTE ON SLICE: In 2016, Rajan who had earlier worked with Flipkart after graduating from IIT Kharagpur in 2014, started Slice as a fintech company. The parent company of Garagepreneurs Internet Private Limited (Garagepreneurs) was the parent company of Slice.. BACKGROUND NOTE ON NESFB: NESFB was started as a society in 1995 under the title “Rashtriya Gramin Vikas Nidhi,” with its corpus funded by some of the leading Indian financial institutions such as IDBI, IFCI, NABARD, and Dorabji Tata Trust SLICE – NESFB MERGER: In 2022, Slice acquired a 5% stake in NESFB at around US$3.4 million at a valuation of US$68 million. Later in the same year SYNERGIES: One of the main points of the merger was that it resulted in a new entity to cater to numerous unbanked customers. THE CHALLENGE: The merger of a fintech company with an ailing SFB brought several challenges to the fore. Slice had its strengths of being a cash-rich fintech company. THE WAY FORWARD: The merger of Slice and NESFB was a pioneering development in the banking space, and the goal was to integrate a technologically EXHIBITS: |
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