On Monday, IDBI Bank said that it has agreed to cooperate with Vayana Network as its first fintech partner to provide end-to-end digitization services.
According to the bank, this alliance intends to help increase the penetration of supply chain finance in India, which now accounts for only 5% of total outstanding banking assets and less than 1% of the country’s GDP.
The adoption of end-to-end digitalization would allow IDBI Bank to offer comprehensive digital solutions to corporate banking and small business clients. The bank already has an established CMS and e-trade platform. This technology is meant to speed up customer experiences by cutting down on paperwork and transaction processing time.
According to Rakesh Sharma, managing director and chief executive of IDBI Bank, “Fintechs have revolutionised the SCF segment by digitising the interaction between all the stakeholders, even though historically banks have preferred lending working capital loans over supply chain financing due to various constraints and challenges. Technology is improving process efficiency, flexibility, and transparency while giving end users value-added services.
The supply chain finance market in India is currently valued at over 60,000 crore and is anticipated to expand by 17% annually, according to J Samuel Joseph, deputy managing director of IDBI Bank.
“We sought out this relationship to take advantage of the opportunities present in the current SCF market. In order to add value for our corporate banking and MSME clients, we are actively participating in a wide range of activities as part of our core strategy, according to Joseph.
