Finance Ministry to nudge state-run banks to look beyond flagship schemes like Start up India

NEW DELHI: The finance ministry may nudge state-run lenders to look beyond financing flagship schemes, Start up India & Stand up India.

A senior finance ministry official said banks will be asked to help new entrepreneurs by providing financial management services and guidance on other business aspects.

Under the 'Stand up India Scheme', the government aims to achieve the target of at least 2.5 lakh approvals in three years from the launch of the scheme, which aims to facilitate at least two projects per bank branch, on an average one for each category of entrepreneur. Under the Stand up India scheme, the government looks to promote entrepreneurship among schedule caste, scheduled tribe, and women entrepreneurs. According to the scheme, bank loans repayable up to seven years and between Rs 10 lakh and Rs 100 lakh for greenfield enterprises in the non-farm sector, will be given to schedule caste, schedule tribe and women borrowers.

"State Bank of India (SBI) has already taken the lead and we expect other banks to follow suit," said the above quoted finance ministry official, adding that banks can create an ecosystem for new ventures where they can get expertise in other areas.

SBI has already launched its first start-up focused bank branch in Bengaluru — SBI InCube — which will offers advisory services to budding entrepreneurs under one roof.

"The bank would love to give entrepreneurs loans when they turn more mature," said bank's chairman Arundhati Bhattacharya at launch of the branch, adding that this is a place where entrepreneurs can come and discuss what are the requirements needed for setting up a company, get current accounts opened, and help them understand concepts like a company's articles of association.

"The banks will need to hand hold some of these entrepreneurs and guide them on various other business aspects," the above quoted finance ministry official said.