Only no objection certificate given for NE SFB-Slice merger proposal: RBI

No change in approach to banking license to fintechs

The Reserve Bank of India (RBI) announced on Thursday that it has granted a no objection certificate (NOC) for a merger proposal submitted by one of the financial companies, Slice, seeking to merge with North East Small Finance Bank (SFB). The RBI emphasised that there is no change in its approach regarding the issuance of banking licences to financial technology (fintech) companies.

M Rajeshwar Rao, RBI deputy governor, addressed the matter during a post-monetary policy review media interaction, saying, “Firstly, it’s important to note that the proposed merger has not yet received approval. The RBI has issued an NOC for the proposal submitted by one of the non-banking financial companies to merge with North East SFB. This is a long-drawn-out process conducted under the supervision of the National Company Law Tribunal, and we have granted the NOC. However, our approach towards fintechs remains unchanged.”

Regarding the approval of banking licences or proposals for voluntary amalgamation, Rao explained that the RBI conducts a fit-and-proper assessment, scrutinising the financials involved and the future structure of the bank or the merged entity before making a decision. He added that there has been no alteration in the RBI’s approach.

Earlier this week, North East SFB, a Guwahati-based lender that had violated the RBI regulations concerning capital and promoter shareholding, received potential support. Fintech firm Slice intends to inject capital to help dilute the existing promoters’ holding.