The Tamil Nadu FinTech Policy 2021 has set a vision to transform the State into a leading global destination for fintech firms by 2025. The State government is cognisant of the roles essayed by different fintech stakeholders and intends to support and nurture them by providing a customised set of incentives for each, said the policy released by Chief Minister MK Stalin on Tuesday at the Investment Conclave held in Coimbatore.

Fintech is an emerging sector that the Tamil Nadu government is strongly promoting. It has already-kick started the implementation of fintech city in Chennai at a cost of ₹165 crore.

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The policy seeks to support fintech start-ups in multiple ways including reimbursing 75 per cent of operational expenses and 100 per cent of SGST for three years apart from repayment of costs incurred for training and marketing.

Regionally balanced

The government seeks to promote regionally balanced development in the State by providing higher incentives for firms setting up in Tier 2 and 3 cities. Incentive limits for fintech firms in Tier 3 cities shall be double that of those in a Tier 1 city while those setting up in a Tier 2 city shall have limits increased to 1.5 times of that of Tier 1 cities.

Funding avenues

In addition to supporting fintech start-ups and large firms venturing into the sector, the State government will support angel funds, private equity, venture capital funds and incubators.

Fintech start-ups now have multiple funding avenues including Tamil Nadu StartUp Seed Grants, Tamil Nadu Emerging Sector Seed Fund, Digital Accelerator under Yaadhum Oorae and State Innovation Fund.

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Srivats Ram, President, Madras Chamber of Commerce and Industry, said, “We believe that this could be a driver for growth and higher value-added employment generation for the State as we have the necessary ingredients to build a FinTech ecosystem.”

Ramkumar Ramamoorthy, Pro Vice-Chancellor, Krea University, and former CMD of Cognizant India, said, “The policy lays great stress on ensuring that this opportunity expands to Tier 2 and Tier 3 cities by creating a hub-and-spoke model for inclusive growth. Given the high levels of urbanisation in the State and availability of technology and finance talent across the State, having dedicated labs in neo-TIDEL parks will enable distributed innovation and entrepreneurship and well-rounded growth across the State.”

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