After years of burn, Slice looks to turn profitable in FY26

Mint

a day ago

Three years after a regulatory crackdown disrupted its core business, fintech startup Slice says it has turned profitable on a monthly basis and is targeting full-year profitability in FY26.
The turnaround follows its transition into a regulated bank after its final merger with North East Small Finance Bank (NESFB) in October 2024.
Slice was among several fintechs forced to stop offering credit line offerings via prepaid payment instruments (PPI) wallets after the Reserve Bank of India's 2022 circular. This effectively shut down Slice's popular card offering, which had gained traction among younger Indian users.
Following its acquisition and merger with NESFB, Slice has stabilised its operations, consolidated assets, and transitioned into a deposit-funded, digital-first bank, founder and executive director Rajan Bajaj told Mint.
'We are now PAT-positive on a monthly basis. That was a milestone we had set for ourselves after the merger, and we have been able to achieve it quite early," Bajaj said.
However, the small finance bank has not yet disclosed audited financials for FY24, and the profitability target remains based on internal metrics.
Slice saw its revenue surge in FY23, reaching ₹847 crore, a threefold increase compared to the previous year. However, this growth was accompanied by a significant rise in losses, reaching ₹406 crore, a 59.8% increase from FY22.
'We have converted into a public entity now, we just haven't listed yet," Bajaj said. 'As a bank, you have to list after a certain point. We want to do that in the next 3–4 years."
Full banking status
Slice's evolution from a non-bank lender into a full-stack bank comes at a time when several fintech peers are still grappling with regulatory headwinds.
The RBI has turned down other applications for banking licences, including that of Navi, making Slice's route—via the merger with an existing bank—an exception.
With NESFB's licence, Slice has access to core banking infrastructure, the ability to raise retail deposits, and offer regulated credit products.
'We've converted into a public entity, we just haven't listed yet," he said, noting that banks are required to go public after a certain point. Slice aims to list within 3–4 years.
According to Bajaj, the bank is onboarding approximately 3 lakh customers per month since October and claimed the bank has doubled its deposit base post-merger, though the actual value of deposits was not disclosed.
One of Slice's key products is a repo-rate-linked savings account, which passes on 100% of the prevailing repo rate to depositors. Interest is calculated daily and credited directly to users' accounts. 'Most banks don't give the full repo rate to customers. They offer 2.5–4%. We're changing that," Bajaj said.
This comes at a time when the RBI's third consecutive rate cut, bringing the repo rate to 5.5% in June, has prompted banks to reduce FD interest rates, impacting deposits.
UPI-linked credit card
Slice is betting big on a UPI-linked credit card aimed at India's 300 million underserved but credit-worthy users.
'We think the credit card product is going to get redesigned for India, just like payments got redesigned in the last 10 years," Bajaj said.
The product allows users to make QR code-based UPI payments using their approved credit limit. Bajaj said about 5 million users have accessed Slice credit so far, and half of them were new-to-credit customers.
Earlier this year, NPCI chief Dilip Asbe underscored the push to onboard an additional 200–300 million users to UPI to 'break their cash memory," pointing to the potential size of the addressable market.
Digital branchesSlice has opened its first UPI-led digital bank branch in Bengaluru's Koramangala, featuring a Slice-branded UPI ATM that allows cardless cash deposits and withdrawals using any UPI app. 'You don't have to carry your debit card. That's a relic of the past," Bajaj said.
While banks like SBI and Hitachi have previously piloted UPI ATMs, Slice plans to scale aggressively with installations across 600 districts, including rural areas. Bajaj noted that earlier pilots suffered from low visibility and uptake.
Slice primarily competes with other small finance banks and potentially traditional banks in the digital banking space, apart from other credit card players in fintech.
The bank is also expanding into merchant-facing infrastructure, such as current accounts, QR-code-based collections, and faster settlement cycles, in a bid to become the primary digital bank layer for UPI users.
'To build a true UPI credit card ecosystem, you have to solve the problem end-to-end, for both consumers and merchants."
On future fundraising, Bajaj said Slice is not actively seeking external capital at the moment, citing strong deposit inflows and capital adequacy. 'We're not doing any formal discussions right now. But as and when we need capital, we will raise," he said.
Since its inception in 2016, the company has raised close to $342 million in multiple funding rounds from investors such as 360 One, Insight Partners, and Tiger Global Management, among others.