Slice CEO Rajan Bajaj: Banking Licenses Are Essential for Digital Success
Rajan Bajaj argues that India's digital banking future requires full licenses, not fintech distribution.
1The Shift to Licensing
Rajan Bajaj, CEO of Slice Small Finance Bank, asserts that India's equivalent to Revolut or Nubank will emerge from licensed banks rather than pure-play fintech distributors. Following the October 2024 merger with North East Small Finance Bank, Slice transitioned into a regulated entity to control its core banking infrastructure and customer acquisition strategies.
2Operational Efficiency Strategy
Slice aims to compete against traditional banking inefficiencies by leveraging proprietary technology. The company spent three years developing its core banking system and in-house video KYC processes using AI agents. This vertical integration allows for faster product iterations and reduced reliance on third-party vendors, ultimately lowering the cost of serving each customer.
3Deposit Growth Dynamics
The transition to a bank has significantly bolstered Slice’s deposit base, which more than doubled to ₹5,132.6 crore by March 2026. Savings deposits nearly quadrupled during FY26, supported by a 5.5% interest rate strategy. This shift reduces reliance on external borrowings, which declined from ₹1,139.5 crore to ₹822 crore over the same period.
4Transparency in Savings Rates
Bajaj highlights a competitive advantage in transparent interest offerings. While some banks advertise high rates that only apply to specific balance thresholds, Slice credits its 5.5% annual rate daily on the total balance. This approach is designed to build trust and attract a loyal retail deposit base, distinguishing the firm from competitors.
5Merchant Banking Expansion
Launched in November 2025, the Slice business app provides merchants with current accounts, QR codes, and collateral-free loans up to ₹10 lakh. By March 2026, merchants processed ₹6,000 crore in payments. Slice utilizes transaction records and GST data to assess creditworthiness, aiming to capture the underserved small business market through digital-first financial services.
6Financial Performance Metrics
Slice reported a net profit of ₹48.4 crore in FY26, recovering from a ₹216.7 crore loss the previous year. Total income surged to ₹1,402.7 crore. By the June quarter of FY27, net profit reached ₹50.9 crore, driven by improved operating leverage as expenses fell to ₹226.1 crore from the previous quarter's ₹249.1 crore.
7Managing Credit Risk
Maintaining asset quality remains a priority as the loan book expands. The gross non-performing asset ratio improved to 4.4% by the end of the June 2027 quarter, down from 4.8% in March. Despite this, gross bad loans rose to ₹222.5 crore, reflecting the inherent challenges of scaling credit products within a rapidly growing digital bank.
8Future IPO Ambitions
Looking ahead, Slice is preparing for an initial public offering targeted for 2028. The firm continues to diversify its income streams, with non-interest income currently accounting for 42% of total revenue. Bajaj’s long-term vision is to become the primary financial institution for all customers, integrating payments, savings, and lending into one platform.