Jupiter receives NBFC license from RBI, to offer credit lines to customers

• ByStartupStory     |    April 26, 2023

According to reports, Jupiter, led by Jitendra Gupta, has obtained a non-banking finance company (NBFC) license from the Reserve Bank of India (RBI), enabling the neobank to provide credit lines to its customers. The founder mentioned that Jupiter would hire a professional CEO to manage the NBFC, which would be established under Amica Financial Technologies Limited, Jupiter’s parent company. The NBFC will function in parallel with Jupiter, providing additional financial services to its customers.

Jupiter, the neobank led by Jitendra Gupta, has reportedly obtained an NBFC licence from the Reserve Bank of India (RBI), enabling the fintech to provide credit lines to customers. Prior to this, Jupiter had been offering lending solutions through its partner NBFCs. Jupiter has committed INR 100 crore to the NBFC, and recently raised an equivalent amount in debt to support its lending operations. This funding came more than a year after the fintech startup secured $87 million in funding from Tiger Global, QED Investors, Sequoia India and Matrix Partners. The most recent NBFC licence awarded by the RBI was to microlending startup ftcash in November 2022.

According to Jupiter’s cofounder, the NBFC licence will enable the neobank to enhance its revenue streams and profitability in the lending sector, as it can now operate its in-house lending business and directly serve customers. This development is significant as the Reserve Bank of India has reportedly been cautious in granting NBFC licences to fintech startups due to concerns about their ownership and the source of capital funding. Additionally, the RBI has raised concerns about the high interest rates charged by fintech startups.

Jupiter has been providing small-ticket loans of about six months duration with an average size of INR 30,000, but only through partner NBFCs until now. The neobank had earlier launched Bullet, a UPI-based credit product that was later discontinued, and later resumed lending operations through a partnership with Trillion Loans, owned by BharatPe. Last year, Jupiter introduced on-demand salaries for its Pro account holders, allowing users to draw an early salary in the form of a payday loan.

Jupiter’s Early Salary product has reportedly generated a loan book of INR 100 Cr since its relaunch last year. With the newly obtained NBFC licence, the neobank can now operate an in-house lending business and serve customers directly. 

This will help Jupiter increase its revenue streams and margins in lending. In addition to investments and mutual funds distribution, the direct NBFC play also provides another revenue line for the soonicorn. Jupiter attracts new customers through its partnerships with Federal Bank for new deposit openings and salary accounts. In February, Jupiter reportedly acquired HRtech startup sumHR for an undisclosed amount, as exclusively reported by Inc42.

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