Padmaja Chunduru, MD & CEO said that “it is a known fact that Banks find it difficult to fund start-ups , as they do not meet the requirements under traditional models of financing. The business models involving high technology, the lack of visibility of cash flows, credit history, the high burn rate, the high failure rate among start-ups make the process of due diligence for assessing viability by banks difficult. Resultantly, this segment has been almost completely funded by Seed Capital, or Private Equity from India / abroad. Both the GOI and RBI have been constantly bringing in enablers to help this ecosystem.”
Under the project IITMIC will refer start-ups with proven technology and established cash flows to the bank and extend advisory to bank on the business model. The bank will then extend loans up to Rs 50 crore to these start-ups to meet their working capital requirement or purchase of machinery, etc.
Debasish Panda, Finance Secretary said that a lot of initiatives have been taken by Indian Bank premerger and also post merger. He congratulated Indian Bank for launching IND Spring the new model for financing start-ups, which will be a game changer in Banking Industry.
Dr. Ashok Jhunjhunwala, Co- Chairman, IIT Madras-Incubation Cell praised the efforts taken by the Indian Bank Team in finalising the agreement/MOU very quickly. He adds, “For start-ups working capital is a bottle neck, since they don’t have collateral and the entrepreneurs are also not in a position to provide personal guarantee. By launching “IND Spring Board” , Indian Bank has proved that it certainly cares for these entrepreneurs. This is a proud moment for the whole country.”
Senior management of the bank distributed sanction tickets to two entrepreneurs on this occassion.