IIT Alumni Council invites applications from banking and fintech start-ups to be part of it’s next generation banking platform initiative. The platform proposes to pilot new paradigms in MSME funding under the regulatory sandbox or small finance bank licensing framework of the Reserve Bank of India. The platform and related ecosystem constituents could be partly supported by equity funding from the MegaFund consortium.
“Digital and Neo banks have disrupted conventional banking. Old paradigms of a physical bank branch and hundred page loan agreements will soon cease to be relevant. The largest bank in India has an indicative 25,000 bank branches and 250,000 people – yet, it struggles to meet the needs of the MSME sector. Smart contracts, cross border operations, digital lending, non-fungible tokens (NFTs) etc are now proven technologies. Yet, enabling widespread credit availability to the MSME sector remains an unsolved problem. The IIT Alumni Council is working to create an enabling ecosystem and next generation banking platform initiative to solve these challenges” said Ravi Sharma, President and Chief Volunteer of the IIT Alumni Council.
“There are areas in MSME funding that legacy banks can’t do and neo banks won’t do. Take coal production as an example. Future growth could come from automated robotic operations based on digital twins and artificial intelligence. These robots may be owned by hundreds of owners through fragmented ownership across countries. They should be operated by remote operators using global equipment modules. The complexity of such funding makes it very difficult for a legacy bank or a neo bank. This is not the comfort zone of NBFCs either and the largest player in this space is insolvent. Filling this void is critical for the success of Indian manufacturing. And startups are one possible route to new technologies and thus new solutions” adds Dr. Rakesh Seth, an eminent investment banker, IIT Alumnus and member of the Next Gen Banking Task Force.
To be eligible for participation in the banking platform consortium, the start-up should be incorporated as a company, registered with Startup India, have raised at least Rs one crore from shareholders (which should include at least one IIT alumnus or alumni managed entity) and have draft or audited accounts for the financial year 2021-22. Applications meeting these five eligibility conditions may be sent to [email protected].