Slice Small Finance Bank, the newly rechristened entity born from the merger of fintech startup Slice and North East Small Finance Bank (NESFB), has announced a significant milestone: achieving monthly profitability. This crucial development marks a turning point for the bank, which now aims for an Initial Public Offering (IPO) within the next three to four years.

The merger, which received regulatory approvals and became effective in October 2024, has evidently begun to bear fruit. The unified entity, now officially recognized as "Slice Small Finance Bank Limited" by the RBI, has been strategically focusing on leveraging the digital prowess of Slice with the established regional banking network of NESFB. This synergy appears to be paying off, as evidenced by their recent achievement of a positive Earnings Before Taxes, Depreciation, and Amortization (EBTDA) on a single-month basis in March 2025.

This profitability is a strong indicator of the bank's stabilizing operations and growing revenue streams. Following the merger, key performance indicators such as Assets Under Management (AUM) and deposits have shown steady growth. The full-scale rollout of deposit services in April 2025 is expected to further bolster revenue, contributing to sustained profitability.

The journey to this point has involved significant strategic pivots. Slice, initially known for its 'buy now, pay later' (BNPL) platform, had to adapt its business model after the Reserve Bank of India (RBI) introduced new regulations regarding credit on prepaid payment instruments (PPIs). The merger with NESFB provided a pathway to a full-fledged banking license, allowing Slice to offer a comprehensive suite of banking products, including savings accounts and fixed deposits, while maintaining its innovative credit offerings.

The move towards an IPO in the next 3-4 years signals the bank's confidence in its long-term growth trajectory and its ability to attract public investment. Small Finance Banks in India are regulated by the RBI and are mandated to promote financial inclusion by serving unbanked and underserved segments of the population, including small businesses, low-income households, and farmers. While they offer competitive interest rates on deposits and provide customized credit products, the path to sustained profitability and a successful IPO for SFBs hinges on robust risk management and a diversified asset base.

The recent RBI decision to trim the priority sector lending (PSL) target for SFBs from 75% to 60% of Adjusted Net Bank Credit (ANBC) from FY2025-26 onwards could also offer Slice Small Finance Bank more flexibility in its lending portfolio and potentially improve profitability. This regulatory shift allows SFBs to diversify their asset mix while still adhering to their core mission of financial inclusion.

As Slice Small Finance Bank moves forward, its ability to integrate its fintech roots with traditional banking practices, expand its reach nationwide while maintaining its focus on the Northeast, and demonstrate consistent financial performance will be crucial in its endeavor to become a publicly listed entity and "India's most loved bank." The coming years will be instrumental in solidifying its position in the competitive Indian financial landscape.