Apart from the various VCs and PEs, various banks are accelerating the financial technology ecosystem by lending out to fintech startups , while looking for technological solutions and validating the solutions designed together. The validation help the startups help gain confidence for further investments for VC and PE firms.

Banks like Yes Bank, SBI, Kotak Mahindra, HDFC, ICICI and RBL Bank are some of the few investing and conducting sessions for the benefit of the startups. SBI, for instance, is setting up a new innovation centre at Belapur, Navi Mumbai, which will be the address for various fintechs and regtechs which exclusively deal in developing solutions for regulatory issues aring out of new technology like blockchain.

To quote, Sudin Baraokar, head of innovation at SBI, “The innovation centre will house, incubate and accelerate fintech start-ups and will also act as a testing ground for these start-ups. It will be functional by next year.”

SBI, being the biggest innovator has also planned a hackathon with Oracle India to look for new fintech startups the specialize in automated cheque processing, vice and facial recognition to name a few. It has also signed a MOU with IIT Bombay and IIT Kharagpur. Apart from SBI, Yes Bank, HDFC and others are also conduction innovation programs in India, as well as looking for fintech startups internationally.

Though, the banks are becoming key lenders to the startups, they are not looking to acquire the companies. The relationship is that of mutual benefit, the banks benefiting from the newly developed technology and the firms gaining profit in the form of investor confidence, creating a customer base and validation of their technology.