Tuesday, July 16, 2024

Indian startups had $1 billion in deposits with Silicon Valley Bank

Rajeev Chandrashekhar

New delhi, March 17: According to India’s deputy IT minister, Indian startups had deposits worth about $1 billion with Silicon Valley Bank before it was shut down by regulators. The minister said he suggested that local banks in India lend more to startups to help them transition away from relying on the U.S. banking system.
Silicon Valley Bank was closed on March 10 after a run on the bank resulted in $42 billion of withdrawals in a single day. The U.S. government ensured that all depositors regained access to their funds. However, the closure left startups that had accounts with SVB seeking alternatives.
India’s state minister for technology, Rajeev Chandrashekhar, estimated that hundreds of Indian startups had more than $1 billion collectively held in deposits with SVB. He met with over 460 stakeholders affected by SVB’s closure and passed on suggestions to India’s finance minister. The suggestions included offering startups a deposit-backed credit line with local banks in India, using funds from SVB accounts as collateral.
Chandrashekhar said the goal is for Indian startups to rely more on domestic banks rather than foreign banks with “complex cross border U.S. banking system[s] with all of its uncertainties.” India has a large startup ecosystem, with many startups achieving multi-billion-dollar valuations and receiving funding from foreign investors. The minister’s suggestions aim to support this ecosystem with a more stable Indian banking system for startups.