Indian startups have deposits worth $1bn in SVB: minister

Mumbai:

Indian startups had deposits worth around $1bn with struggling Silicon Valley Bank and the country’s deputy IT minister said he had suggested local banks lend them more in the future.

California banking regulators shut down Silicon Valley Bank (SVB) on March 10 after a run on the lender, which had $209 billion in assets at the end of 2022.

Depositors withdrew as much as $42 billion in a single day, rendering it insolvent. The US government eventually stepped in to ensure that depositors had access to all of their funds.

“The problem is how do you transition startups to the Indian banking system, rather than relying on the complex US cross-border banking system with all its uncertainties in the coming month?” India’s Minister of State for Technology, Rajeev Chandrashekhar, said Thursday evening in a Twitter chat.

Hundreds of Indian startups had more than $1 billion of their funds in SVB, according to his estimate, Chandrashekhar said.

Mr Chandrashekhar met with more than 460 stakeholders this week, including startups affected by SVB’s shutdown, and said he had forwarded their suggestions to Finance Minister Nirmala Sitharaman.

Indian banks could offer a deposit-backed line of credit to startups that had funds in SVB, using them as collateral, Chandrashekhar said, citing one of the suggestions he passed on to the finance minister.

India has one of the largest startup markets in the world, with numerous multi-billion dollar valuations in recent years and the backing of foreign investors, who have made bold bets on digital and other technology ventures.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)