In a move to help startups in India, the country’s largest public sector bank, the State Bank of India (SBI), has set up a Rs. 200-crore fund. The fund named ‘IT Innovation Start-up Fund’ will be a dedicated IT innovations and startup corpus and will be used to for investing in promising startups in the financial sector. Up to Rs 3 crore in assistance can be provided to an India-registered company for promoting its business innovations using information technology (IT) for banking.
“With emergence of technology, banks are facing twin challenges of managing their technology legacy stack and bringing the cost down for small transactions,” said SBI Chairperson Arundhati Bhattacharya at a CII event in Mumbai.
New-age banking and financial services firms have been able to disrupt the traditional business models followed by conventional banks. The new entrants, armed with new technology such as Cloud and Big Data Analytics, have succeeded in providing the same services at lower costs.
Bhattacharya also said that with the coming of new technology the existing banking systems need to learn from the new entrants and should also make inroads into new and unexplored areas of customer services, eventually enriching the banking experience of customers.
“Banks today need to cross sell in collaboration with fintech companies as they are here to stay,” said Bhattacharya.
“Finance is an issue for SMEs and startups. The SBI has taken a timely step and this will bring both the financial sector startups and the bank closer and lead to a better understanding among them. India’s banking system also needs to incorporate elements from new-age technology such as Cloud and Big Data. Deskera is moving ahead in that direction of bringing startups and banks closer. Our technology can help banks such as SBI monitor and oversee the functioning of an enterprise and how funds are being used. Due to this feature, startups won’t be able to divert funds for other uses,” said Shashank Dixit, CEO, Deskera, a business software company working in the SME segment.
Keeping in view the government’s thrust on initiatives such as Digital India, Make in India and the startup industry as a whole, a number of public sector undertakings have taken the cue and have sought to assist the sector.
The SBI chief pointed out that the country’s largest lender had formed a mentoring team to assist start-ups and monitor the utilization of funds. The SBI team will support and guide businesses in several areas, she added. The banking behemoth would also provide legal and financial assistance to the startups.