Neobanking Soonicorn Jupiter Gets NBFC Licence From RBI

Jitendra Gupta-led neobank Jupiter has reportedly secured a non-banking finance company (NBFC) licence from the Reserve Bank of India (RBI), which would allow the neobank to issue credit lines to customers.

Gupta told ET that the startup will now hire a professional CEO to run the NBFC, which will be housed under Amica Financial Technologies Limited, the parent company of Jupiter. As such, the NBFC will operate in parallel with Jupiter.

Till now, Jupiter has been offering lending solutions through its partner NBFCs. Per Gupta, Jupiter will invest INR 100 Cr into the NBFC and recently raised the same amount in debt to fund its lending operations. The venture debt funding happened more than a year after the fintech startup raised $87 Mn from Tiger Global, QED Investors, Sequoia India and Matrix Partners.

The last time an Indian fintech startup received an NBFC licence was in November 2022, when the microlending startup ftcash was granted a licence by the central bank.

Per the cofounder, the NBFC licence will help Jupiter bolster its revenue stream and increase margins in lending, since it can now operate an in-house lending business. Further, the soonicorn will be able to directly serve customers instead of working as just a loan-service provider (LSP).

The development also comes months after media reports suggested that the RBI is reportedly apprehensive about giving NBFC licences to fintech startups. The stance is largely a result of concerns related to ownership of these fintech companies and the origin of capital flowing into these firms.

Other issues reportedly flagged by the RBI include exorbitant interest rates charged by the fintech startups.

Jupiter’s Current Lending Offerings

For now, the startup has been issuing short-term, small-ticket loans of around six months in duration and an average ticket size of INR 30,000. The neobank had started with a UPI-based credit product, Bullet, which was discontinued in 2021.

The soonicorn has since relaunched its lending operations by partnering with BharatPe-owned Trillion Loans. Last year, Jupiter launched on-demand salaries for Pro account holders. This allowed users with Jupiter accounts to draw an early salary in the form of a payday loan.

Since the relaunch last year, Jupiter is said to have a loan book of INR 100 Cr through its Early Salary product.

With a direct NBFC play, Jupiter has another revenue line beyond investments and mutual funds distribution. It brings in customers through new deposit openings and salary accounts in partnership with Federal Bank.

In February, Inc42 exclusively reported that Jupiter had acquired HRtech startup sumHR for an undisclosed amount.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.