Kerala-based private sector lender Federal Bank is all set to start ‘Launchpad’, a dedicated service for startups. Federal Bank is opening incubation centres for startups in Bangalore and Ernakulam. These specialized lounges in the bank’s branches will offer advice on capital, regulatory support and even disburse funds.
“We have a dedicated startup fund worth $3.7 million (INR 25 crore) which we would like to use to fund or lend to promising startups,” said Shyam Srinivasan, managing director of Federal Bank.
“We are talking to three or four startups daily. The challenge for a bank is to move away from a conservative credit mindset to a more entrepreneurial mindset and to accept the fact that out of 40 or 50 investments, only one might take off. So, even we are in the process of understanding how to engage with startups better”, he added.
Key Highlights:
- These lounges, named Launchpad – with fast internet connections, support staff from the financial world and advisory mechanisms – would be the perfect breeding ground for future entrepreneurs.
- The lounges would be manned by bank executives capable of dealing with the financial requirements of startups as well as local specialists who would be able to advise on regulatory issues.
- The bank is also mirroring HDFC Bank and SBI in integrating its platform with mobile payments application ‘Chillr‘.
- The addition that Federal Bank brings to the ‘Chillr’ application is that they would allow even non-Federal Bank users to instantly open a Federal Bank account through a selfie and an ‘Aadhaar’ identification number and allow them to receive payments through ‘Chillr’.
In September 2015, the 70-year-old Aluva-based Federal Bank had started this $3.78 million startup fund to exclusively look at small-ticket projects with funding up to $15K (INR 10 lakh).
Earlier this month, HDFC Bank Ltd launched SmartUp, a dedicated banking solution for startups, in association with Zone Startups India, a startup accelerator, in Mumbai. Prior to this, in January 2016, The State Bank of India launched its first exclusive startup bank branch SBI InCube in Bangalore.
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