Indian startups have deposits of about $1 billion in SVB, minister says

MUMBAI, March 17 (Reuters) – Indian startups had deposits value about $1 billion with embattled Silicon Valley Financial institution (SIVB.O) and the nation’s deputy IT minister mentioned he had steered 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 in belongings on the finish of 2022.

Depositors pulled out as a lot as $42 billion on a single day, rendering it bancrupt. The U.S. authorities finally stepped in to make sure that depositors had entry to all their funds.

“The difficulty is, how can we make startups transition to the Indian banking system, somewhat than depend upon the advanced cross border U.S. banking system with all of its uncertainties within the coming month?” India’s state minister for expertise, Rajeev Chandrashekhar mentioned late Thursday evening in a Twitter areas chat.

A whole lot of Indian startups had greater than a billion {dollars} of their funds in SVB, in line 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 options to Finance Minister Nirmala Sitharaman.

Indian banks may provide a deposit-backed credit score line to startups that had funds in SVB, utilizing these as collateral, Chandrashekhar mentioned, citing one of many options 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 in recent times and getting the backing of overseas traders, who’ve made daring bets on digital and different tech companies.

Reporting by Shilpa Jamkhandikar in Mumbai. Enhancing by Gerry Doyle

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