Canara Bank forms separate vertical for start-ups; to open 5 branches

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Public sector lender Canara Bank has set up a separate vertical to attend to needs of start-ups, and is in talks with over 60 such entities.

Ashok Chandra, executive director of Canara Bank, told Business Standard that the future action plan of the bank for providing end-to-end solutions to start-ups includes specialised branches for easing operations. “In the beginning, it will have special branches in Mumbai and Bengaluru,” he said.

The lender is planning to open five start-up-specific branches in the current financial year.

“Start-ups may diversify their portfolio in light of the recent failure of some banks in the US and other countries,” Chandra said.

US-based Silicon Valley Bank was instrumental in financing start-ups and technology players. It faced stress after incurring huge losses on its holdings of US bonds, following the most-aggressive monetary tightening cycle by the Federal Reserve in around four decades.

Going forward, the bank plans to rope in venture fund, which will provide seed capital in the form of equity. The Bengaluru-based lender has a risk funding arm Canbank Venture Capital Fund.

Canara Bank may approach the Indian Banks’ Association (IBA) for revising staff accountability norms for PSBs as it could become a hurdle in the support to start-ups.