Indian Startups Have Deposits Value $1 Billion in SVB, Says IT Minister

Indian startups had deposits value about $1 billion (roughly Rs. 8,250 crore) with embattled Silicon Valley Financial institution and the nation’s deputy IT minister mentioned he had recommended that native banks lend extra to them going forward.

California banking regulators shut down Silicon Valley Financial institution (SVB) on March 10 after a run on the lender, which had $209 billion (roughly Rs. 17 lakh crore) in property on the finish of 2022.

Depositors pulled out as a lot as $42 billion (roughly Rs. 3.4 lakh crore) on a single day, rendering it bancrupt. The US authorities ultimately stepped in to make sure that depositors had entry to all their funds.

“The difficulty is, how will we make startups transition to the Indian banking system, quite than depend upon the complicated cross border US banking system with all of its uncertainties within the coming month?” India’s state minister for know-how, Rajeev Chandrasekhar mentioned late Thursday night time in a Twitter areas chat.

Lots of of Indian startups had greater than a billion {dollars} of their funds in SVB, in keeping with his estimate, Chandrashekhar mentioned.

Chandrashekhar met greater than 460 stakeholders this week, together with startups affected by SVB’s closing, and mentioned he had handed on their strategies to Finance Minister Nirmala Sitharaman.

Indian banks might supply a deposit-backed credit score line to startups that had funds in SVB, utilizing these as collateral, Chandrashekhar mentioned, citing one of many strategies he had handed on to the finance minister.

India has one of many world’s greatest startup markets, with many clocking multi-billion-dollar valuations lately and getting the backing of international traders, who’ve made daring bets on digital and different tech companies.

© Thomson Reuters 2023

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