The country’s largest lender State Bank of India (SBI) will extend a helping hand to startups through a dedicated branch, SBI InCube. This development comes days ahead of the much talked about and much awaited Start-up policy, to be announced by the central government on January 16.
SBI InCube, which has been launched in the country’s startup capital of Bengaluru, will provide budding young entrepreneurs advisory services ranging from setting up a company to issues related to taxation, and forex remittances.
Arundhati Bhattacharya, chairman SBI, said the SBI InCube initiative has been designed and conceptualised after taking feedback from India’s top technocrats and angel investors such as Nandan Nilekani and Mohandas Pai, among others.
“Basically, this is a place where they (entrepreneurs) can come and discuss what are the requirements needed for setting up a company, get their current accounts opened, and help them understand concepts like a company’s articles of association,” added Bhattacharya.
Most young entrepreneurs she said may just have “a simple savings account” and may not know the legal requirements for setting up a company. “Financing is not the only thing that startups need. They need financial management advice, they need to understand how to manage their companies, and they need to be free of these worries so that they can concentrate of what they do best — which is innovate,” she said.
Bhattacharya categorically stated that SBI InCube would not extend loans to startups, as startups “don’t qualify” for commercial loans. “Once they mature and qualify for loans, we would love to give it to them.”
In regards to funding startups, she said, “We are custodians of public funds which we need to return. Venture capitalists and angel funds have a very large risk appetite which we don't have.”
SBI plans to rollout its InCube branches to Pune and the National Capital Region (NCR), the other two hotbeds of startup activity in the country.