Bengaluru-based fintech start-up, Slice, was in talks with current and potential buyers to lift an extra $50 million in a brand new funding spherical. Nonetheless, these plans haven’t hit a roadblock after the Reserve Financial institution of India (RBI) issued a round barring pay as you go fee devices (PPIs) from loading credit score traces.
Reporting this improvement, Financial Instances added that the corporate does have ample capital from its earlier funding spherical. Now, buyers are awaiting readability concerning the RBI diktat and its implications for the fintech ecosystem and its enterprise fashions earlier than taking any fiscal choices.
RBI Cracks The Whip
On 20 June, RBI requested non-bank wallets and pre-paid playing cards from loading their credit score traces into these platforms with instant impact. That is seen as an try to forestall fintech and NBFCs from working as neo-banks to supply credit score traces.
Its round acknowledged, “The PPI-MD doesn’t allow loading of PPIs from credit score traces. Such follow, if adopted, needs to be stopped instantly. Any non-compliance on this regard might entice penal motion beneath provisions contained within the Cost and Settlement Methods Act, 2007.”
At the moment, RBI states that pre-paid devices could be loaded utilizing money, financial institution accounts, and credit score and debit playing cards. The rules don’t permit credit score traces to high up these devices.
The Funds Council of India (PCI) and several other fintech requested the federal government to step in to resolve the fallout from the RBI directive. Most new-age fintech start-ups challenged their legacy friends with their bank card choices. Nonetheless, they now discover themselves on a sticky wicket because the RBI directive has queered the pitch. This may influence their skill to lift funds in an already difficult funding panorama.
Slice Of The Fintech Pie
Rajan Bajaj based Slice in 2016, providing credit score and fee playing cards in affiliation with Visa and SBM Financial institution. His goal was younger and first-time customers with restricted to no credit score historical past.
The corporate lately rolled out its UPI funds product, shifting its focus from offering credit score to providing total funds. This shift pitches it towards rivals like Paytm, PhonePe, Google Pay, and BHIM.
In June 2022, Slice stated in a submitting with the Registrar of Corporations that it had acquired shareholders’ approval to lift Rs 200 crore by allotting Non-Convertible Debentures (NCDs), which was reported by YourStory first. The beginning-up didn’t reveal the timeline for the debenture subject, although.
The fintech became a unicorn after it raised $220 million from Tiger International and Perception Companions in its newest funding spherical late final 12 months. This got here a month after the fintech start-up raised $50 million as a part of its Collection C spherical from Tiger International Administration, Moore Strategic Ventures, Perception Companions, and GMO VenturePartners.
