Bengaluru, Jan 14 (IANS) State Bank of India (SBI) chairman Arundathi Bhattacharya on Thursday announced Intech, an initiative to team up with startups to create financial technology (FinTech) solutions for banks.
Intech will a space within SBI’s startup bank InCube where interested startups with knowledge on financial sector problems will be given access to SBI’s Application Programme Interface (APIs) to experiment.
“And these people (startups) with the APIs and with the knowledge of some of the problems that the financial sector is facing can actually experiment and come up with solutions. Initially maybe for the bank (SBI) and then obviously in many other financial institutions,” said Bhattacharya.
She ruled out the prospect of startups getting loans from the bank.
“Startups actually do not qualify for commercial loans… startups need venture capital funding and angel funding which is not really the cup of tea for commercial banks.
“We will be funding them when they become a little more matured, and they are capable of showing some kind of steady cash flow, or they have sufficient number of orders for screening, surely they can become good candidates for screening and we will definitely look at it,” she said.
SBI’s current focus is to offer services rather than loans to startups.
Highlighting financing is not the only requirement of startups, Bhattacharya said financial management advice and understanding how to manage companies is very crucial for startups which SBI aims to offer through InCube.
Future branches of InCube will come up in Pune and National Capital Region (NCR) where a lot of startup activity is also happening.
SBI sought feedback from technocrats and mentors like Mohandas Pai and Nandan Nilekani for setting up InCube and to understand the unique needs of startups.
Bhattacharya also said SBI currently has no plans to help startups get funds from venture capitalists but said the bank might look at a proposition like that in the future as the latest initiatives are also a kind of startup activity for the bank.