The Competition and Markets Authority (CMA) had said in February that the two doorstep lenders would have to hold off from integrating after any deal, to protect staff and customers while it considers the market impact.
The CMA is now examining NSF's plans to demerge its home credit business and whether this would address potential competition concerns.
The CMA is asking for comments by June 12 and is set to make a decision on July 23. It comes ahead of a deadline on June 5 for the offer to be declared wholly unconditional.
NSF has already acknowledged the merger would lead to reduced competition in the home credit sector and has put forward plans to demerge its home credit business, Loans at Home, to address this.
Having filed the plans with the CMA, NSF said it believed a "de-merged Loans at Home will be independent of NSF, and continue to be a viable and effective competitor for home credit, especially given its strong market position as the UK's third largest provider of home credit".
NSF's chief executive John van Kuffeler added: "We remain confident in the merits of our offer and the benefits it will bring for Provident, its customers, employees and shareholders."
A spokesperson for Provident retorted: “It’s taken over three months for NSF to submit their filing with the Competition and Markets Authority and they admit the transaction would lead to a substantial lessening of competition.
"Having waited until declaring the bid unconditional, they have put our shareholders in the impossible position of having to consider the transaction without knowing what the competition remedies and costs might be. We believe that there is a very real risk of a Phase 2 review lasting six months or more. By delaying they have treated our independent shareholders with contempt.”
On Tuesday, another shareholder in Provident - M&G, which owns a 1.7 per cent stake in the group - said it would not back NSF's £1.3bn offer to buy the credit company.
M&G said in a letter that it does not believe the move will benefit shareholders, as the battle for control rumbles on.
Asset manager Schroders, which holds a stake of around 15 per cent in Provident, has also publicly said it will not support the takeover.
NSF tabled the bid with backing from 50 per cent of investors but said it wanted to get 90 per cent of shareholders to support the offer.
NSF has secured the backing of some of its major shareholders including investment guru Neil Woodford, Invesco and Marathon, who together hold a 49 per cent stake.
Last week NSF said it had the support of investors holding 53.5 per cent of Provident's stock and will continue to pursue a hostile takeover.
Provident said that approximately 20.2 per cent of shareholders have publicly stated that they do not intend to accept the offer.