IDBI Bank partners Vayana Network on supply chain finance

Mumbai: IDBI Bank on Monday said it has signed a memorandum of understanding with Vayana Network as its first fintech partner for end-to-end digitalization services.

This partnership, the bank said, aims to contribute in the growth of the supply chain finance penetration in India, which is less than 1% of gross domestic product (GDP) and contributes only 5% of the outstanding banking assets.

According to a statement, IDBI Bank has an existing CMS and e-trade platform and with the introduction of end-to-end digitalization, the bank aims to provide complete digital solutions to corporate banking and small business clients. This platform is expected to reduce paperwork, and transaction processing time while providing a smooth customer experience throughout.

Rakesh Sharma, managing director and chief executive, IDBI Bank said, “Although traditionally banks have preferred lending working capital loans over supply chain financing due to various constraints and challenges, in the present context, fintechs have revolutionized the SCF segment by digitizing the interaction between all the stakeholders. Technology is making the process more efficient, flexible, transparent and is providing value-added services to end users.”

According to J Samuel Joseph, deputy managing director, IDBI Bank said, the current supply chain finance market in India is estimated at 60,000 crore and is expected to grow by 17% per annum.

“We have sought this partnership to leverage the opportunity available in the existing SCF market. As a part of our core strategy, we are engaging in a varied range of activities with new ways of expanding with innovative solutions so as to create value for our corporate banking and MSME clients,” said Joseph.

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