In sync with the Indian government plans to support the start-ups, India’s largest public sector bank, the State Bank of India (SBI) has created a dedicated fund of Rs. 200 crore for the startups in the financial technology.
Arundhati Bhattacharya, Chairman, SBI announced that it will be referred as ‘IT Innovation Start-up Fund’. Any company registered in India is eligible for Rs.3 crore for promoting their business in India using Information Technology for banking. Acknowledges the fact that fin-techa companies add value to the banking services, she further added "We would be looking at using the available financial technology platforms for cross selling of our banking products, while they might be competing with us on various sectors, on various other areas we can collaborate and help each other".
The National Bank had already ventured into the option with a small branch called InCube in Bengaluru this January. InCube not only provides the financial support but also acts as a single point contact for financial and legal assistance. In a small time frame the bank was able to enlist 200 clients, now SBI desires to take the venture on the national level.
The Bank has also created an entity to promote and ensure usage of the funds for the right purposes; the entity could have one or more technical experts on board for advisory role to provide support to startups.
Recently, there has been a steep rise in investments in Fintech companies with figures going from $145.1 million (nearly Rs 1,000 crore) in the year 2014 to $1.2 billion (Rs 8,000 crore) in 2015. Multinational Banks are also now looking for investment opportunities in the startups as digital banking has considerably paved its way into lives of common people.