State Bank of India (SBI), India’s largest lender, on January 14 opened a specialized br—SBI InCube—that will cater to the specific financial needs of start-ups in Bengaluru.

The branch will assist start-ups in cash management, taxation, regulations, foreign exchange and remittances, mentoring, and other financial services needs.

The bank’s initiative comes ahead of the much-awaited start-up policy, which is expected to be announced by the Center on January 16. However, InCube, in its current form, cannot fund start-ups.

“We still believe that we are not giving them financial help because financing is not the only thing that start-ups need. What they need is a lot of financial management advice,” said Arundhati Bhattacharya, chairperson of SBI, adding that the bank is open to the idea of investing in mature start-ups if there are signs of profitability.

The lender also launched ‘SBI Exclusif’ to offer specialized wealth management services to its customers. The bank has specialized verticals like Corporate Accounts Group (for large corporate entities), Mid-corporate Accounts Group, and National Banking Group (Small and Medium Enterprises, or SMEs) to address the needs of specific business communities.

Although no timeline has been set for the bank to invest in start-ups, SBI expressing interest in funding such entities itself is likely to raise the hopes of many aspiring entrepreneurs.

Currently, start-ups do not qualify for commercial loans of institutional lenders and depend on venture capital firms and angel investors for funding.

In 2015, start-ups raised $7.4 billion in 894 funding rounds, according to data from start-up tracker Tracxn.

In Bengaluru, InCube will be headed by an Assistant General Manager and a team of three other officers who have experience in managing current accounts, regulations and forex among other functions.

Start-ups will be charged the same fees as SME customers, but any other services from external agencies, including legal advisory, would be charged appropriately, SBI said.

SBI has tied up with investors like Chairman of Manipal Global Education Services and Aarin Capital T.V. Mohandas Pai, co-founder and ex-chief executive of Infosys Ltd Nandan Nilekani and software product think tank iSpirt to help mentor and connect start-ups.

It will open InCube branches in Pune and the National Capital Region in the coming months.

Source: Mint