SBI sets up Rs 200-crore fund for fintech startups
Lender also forms mentoring team to assist startups in utilisation of the funds.
Close on the heels of setting up a startup branch called InCube, State Bank of India has set up a start-up fund to finance startups in the financial technology (fintech) space.
“This fund shall consider assistance of up to Rs 3 crore to an Indian registered company for promoting their business innovations using IT in India for banking and related technology,” SBI Chairman Arundhati Bhattacharya said at the CII Banking Tech summit here.
The ‘IT Innovation Start-up Fund’ will have corpus of Rs 200 crore, she said.
Bhattacharya said the bank has opened a startup branch called InCube in Bengaluru in January. It functions as a single point of contact for the startup account holders for their various banking and financial advisory related requirements. “This branch is not giving actual funding. It handholds startups to create their business plans, finds out their legal requirements, help them with compliance and registration,” she said. It has signed up 200 clients so far.
With the emergence of technology, banks are facing two challenges of managing their technology legacy stack and bringing the cost down for small transactions.
“With the advent of new age technology, banks need to learn from new kids on the block and foray into unexplored areas of services to customer for enriching their banking experience. Banks today need to cross sell in collaboration with fintech companies as they are here to stay,” Bhattacharya said.