Banks are stepping up partnerships with startups: Axis Bank’s New Economy Group head Sanjiv Bhatia | Company Business News – Mint

Private banks are stepping up to build strong relationships with startups and offer a range of services including credit, technology assistance, and networking, driving a more conducive environment for India’s burgeoning startup ecosystem as well as helping banks identify the right customers, a top executive at Axis Bank told Mint.

“Banks are stepping up. This is essentially like the Silicon Valley Bank framework where even if the company is loss-making, you can still lend money to it as long as there’s enough runway on the balance sheet,” Sanjiv Bhatia, president and head of Axis Bank’s New Economy Group (NEG), Financial Sponsors and Multinational Coverage, said in an interview.

However, banks will continue to lend conservatively to startups since their risk appetite is lower than other debt providers. “The fundamental difference between, say, a venture debt provider and a bank is the risk appetite since banks are regulated by the RBI (Reserve Bank of India) and have to follow certain norms,” Bhatia said.

Meeting startups’ need

The Mumbai-based private lender formed the New Economy Group nearly four years ago, aimed at meeting the banking needs of startups that often struggle to find the right banking partners from the get-go. The vertical now banks with 67% of Indian unicorns (startups valued at over $1 billion), Bhatia said.

“When we started four years ago, there was a lot of innovation and new business models coming through in India. We wanted to tap into the opportunities. We were clear we wanted to look into it from a wholesale banking and not necessarily a retail banking perspective,” he said.

The vertical holds a loan book of ₹2,000 crore with a deposits book of ₹25,000 crore from startups and has emerged as the youngest and fastest-growing segment in Axis Bank’s wholesale business, Bhatia said.

NEG has active relationships with more than 700 Series A and above funded startups in the country, helping them with deposits, payments, and technology, among others.

Qualified to take deposits

“As one of the top three private sector banks, we qualify in taking their deposits. We also help them collect money from their clients and make payments to their clients and employees on their behalf,” he said.

“The idea really is that whatever they need from us, we should be able to give. If credit is what they need, we will evaluate it fairly when the need arises. But we don’t lead and push credit into this segment,” Bhatia said.

In September, Axis Bank launched its corporate credit card suite for startups, aimed at helping startups streamline travel, vendor, and other official expenses.

The company has also forged a partnership with TEAM (Tech Entrepreneurs Association of Mumbai) to combine its financial expertise with TEAM’s resources and industry knowledge to help Mumbai’s startup ecosystem.