IDBI Bank partnered with Vayana Network on supply chain finance

IDBI Bank partnered with Vayana Network on supply chain finance: IDBI Bank said that it has agreed to cooperate with Vayana Network as its first fintech partner to provide end-to-end digitization services. The agreement, according to the bank, aims to enhance supply chain finance’s penetration in India, where it now only represents 5% of all outstanding banking assets and less than 1% of the GDP.

News Highlights

• With the launch of end-to-end digitalization, IDBI Bank hopes to offer complete digital solutions to corporate banking and small business clients. The bank already has an established CMS and e-trade platform. With a seamless client experience throughout, this platform is anticipated to cut down on paperwork and transaction processing time.
• Due to several limitations and difficulties, banks have historically opted to issue working capital loans rather than supply chain financing; nevertheless, in the current environment fintechs have transformed the SCF segment by digitizing communication between all parties. Technology is improving process efficiency, flexibility, and transparency while giving end users value-added services.
• According to IDBI Bank, the supply chain finance market in India is currently valued at over 60,000 crores and is predicted to increase by 17% annually.

What is Supply Chain Finance?

Supply chain financing sometimes referred to as supplier finance or reverse factoring, is a collection of technologically advanced business and financing processes that reduce costs and increase efficiency for all parties engaged in a transaction. Supply chain finance works best when the buyer has a stronger credit rating than the seller and can thus get capital at a lower cost. Short-term financing is provided through supply chain finance, which optimizes working capital for both buyers and sellers.

Who is benefited by Supply Chain Finance?

Supplier finance is used by businesses in a wide range of industries, including automotive, electronics, manufacturing, retail, and many more. It benefits businesses on both ends of the supply chain. Purchasing organizations can extend payment periods, and suppliers can be paid sooner. Supply chain finance is a true win-win situation for both trading partners.

IDBI Bank

• IDBI Bank Limited has been categorized as a ‘Private Sector Bank’ for regulatory purposes by Reserve Bank Of India with effect from January 21, 2019.
• It was founded in 1964.
• Tagline of IDBI Bank: Banking for All, Aao sochein Bada
• It’s headquarter is in Mumbai