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Startup drive: State-owned banks stand up to be counted

business Updated: Sep 09, 2015 11:56 IST
Mahua Venkatesh
Mahua Venkatesh
Hindustan Times
State-owned banks

Prime Minister Narendra Modi addressing the nation from the ramparts of the Red Fort on the occasion of 69th Independence Day celebration in New Delhi. (Ajay Aggarwal/ HT Photo)

Action has begun on the government’s next signature initiative to encourage small enterprises and create a favourable ecosystem for startups.

By February next year, state-owned banks have been asked to ensure that each of the 125,000-odd branches give at least one loan to a startup venture proposal by a Dalit or a tribal entrepreneur.

This follows Prime Minister Narendra Modi’s Independence Day announcement that the government was looking at systems for enabling start-ups. “We must be Number 1 in startups. ‘Startup India’ and ‘Stand up India’. Every bank should ensure that its every branch must give loan for startups to at least one Dalit or tribal seeking to establish a startup,” Modi had said last month.

“The effort would be to achieve as much of its target as possible before February…while it has been announced just last month, we have asked all branches to act on this and take it up on priority,” a public sector bank chairman, who did not wish to be identified, told HT. “Branches need not restrict themselves to giving out just one such loan, they can give multiple loans to tribals or Dalits for genuine cases,” he added.

The government, which wants to raise the share of the manufacturing sector to 25% of GDP by 2025, is looking at startups to create jobs for an estimated 15 million people who join the workforce every year.

In his first budget in July 2014, finance minister Arun Jaitley had announced a Rs 10,000-crore-fund to “act as a catalyst to attract private capital by way of providing equity, quasi equity, soft loans and other risk capital for startups.”