At a time when the Reserve Bank of India seems to be opening up to offering lending licences to fintechs, not all are having it easy. Two sources in the know told ET that the regulator has not responded to an acquisition application of a non-banking lender by the founders of Pune-based fintech unicorn One Card housed under FPL Technologies.
Another ‘buy now pay later’ startup, Uni Cards, is also understood to have applied for an NBFC licence from the RBI, but the same is believed to have not gone through yet either, this person added.
“Both licence applications have been ‘returned’, a person briefed on the matter said.
‘Returned’ in regulatory parlance typically means that the application has not been fully rejected, but has been sent back to the applicant to be sent afresh.
The founders of FPL Technologies, which runs the co-branded credit card product OneCard, were trying to acquire an NBFC which was up for sale, people in the know said. OneCard was started by ICICI Bank veterans Anurag Sinha, Rupesh Kumar and Vibhav Hathi. The founders are looking to get the lending licence in their own name.
While the deal got finalised between the two parties, the application to the central bank for clearance has been stuck for more than six months, ET has learnt.
“The founders of OneCard had applied for the acquisition in their own name, but the deal has not received a go-ahead from the regulator,” said one of the persons in the know.
The other person told ET that the application has not been ‘rejected’, but the management of the NBFC might have to apply afresh. If this deal does not go through, OneCard founders will have to scout for another NBFC that is available for sale and start the process all over again, he added.
ET wrote in July that OneCard, Wint Wealth and a clutch of other fintechs were vying for an NBFC licence.
For a regulated entity (an NBFC in this case) to get acquired, it requires clearances from the sector regulator (RBI). ET has learnt that sellers need to apply to the central bank saying that they intend to transfer the licence to the acquirer’s name. Post that, a due diligence would be conducted by the regulator.
“In this case, the application from the NBFC went in months back, but the regulator has either not responded or returned the application,” said one of the persons quoted above.
Benglauru-based Uni Cards, which runs a card product that lets consumers split their purchases into multiple instalments, had acquired peer-to-peer lending startup OmlP2P earlier this year. The startup is understood to have applied for a full service NBFC licence, too, which did not get through.
For Uni, the NBFC licence would have been the third after a prepaid payment instrument (mobile wallet licence) and P2P NBFC licence.
An email sent to OneCard did not elicit any response while Uni’s Nitin Gupta declined to comment on the matter.
Interestingly, this is happening at a time when three new-age fintech startups – Cred, BharatPe and Jupiter – have embarked on their own NBFC journey. Cred acquired Parfait Finance, through an entity named Newtap Technologies, which is owned by Kunal Shah, its founder.
BharatPe acquired an NBFC named Trillion Loans.
On the other hand Jupiter founder Jitendra Gupta, got the NBFC licence in the name of Amica Financial Technologies, which is the holding company.
After the RBI came out with digital lending guidelines and strict first loss default guarantee norms, fintech startups started looking for means to get regulated directly, rather than working as technology providers or marketplaces to lenders.
