Dena Bank, in July 1969 along with 13 other major banks was nationalized and is now a Public Sector Bank constituted under the Banking Companies (Acquisition & Transfer of Undertakings) Act, 1970. Under the provisions of the Banking Regulations Act 1949, in addition to the business of banking, the Bank can undertake other business as specified in Section 6 of the Banking Regulations Act, 1949.
Dena Bank has opened a 'smallB Branch for Innovation & Start-up Finance' in Mumbai under the guidance of Department of Financial Services (Ministry of Finance, Government of India). smallB provides Loan facilities upto INR 10 Millions only covered under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) set up by Small Industries Development Bank of India (SIDBI) and Government of India. In case of scaling of
business and further Debt requirement, same may be considered by normal branch of Bank based on merit.
Innovative and start-up enterprises are often promoted by first generation entrepreneurs and are mostly technology or service sector oriented. Most of them get initial funding from own sources, friends, relatives and risk investors.
The formal banking system has not been able to adequately address the financing needs and expectations of such enterprises, particularly in knowledge-based enterprises, on account of the following –
· These enterprises may not have tangible assets
· These enterprises may take longer period for break-even.
· Corporate governance & disclosures
Around 35% of the patents registered in USA belong to Indian Origin. smallB is an attempt to develop Eco-System for Equity Funding by Angel Investors (or VC Funds) & Debt Financing by smallB Branch.
