Indian startups had about $1 billion in deposits at Silicon Valley Bank, and the country’s deputy IT minister said he suggested local banks lend them more.
California banking regulators shut down Silicon Valley Bank (SVB) on March 10 following an attack on the lender, which had $209 billion in assets at the end of 2022.
Depositors withdrew up to $42 billion in a single day, making it insolvent. The US government eventually intervened to ensure depositors had access to all their funds.
“The problem is, how do we ensure that start-ups migrate to the Indian banking system, rather than having to depend on the complex cross-border US banking system with all its uncertainties for the coming month?” India’s Minister of State for Technology Rajeev Chandrashekhar said in a Spaces Twitter chat late Thursday.
Hundreds of Indian startups, he estimated, had more than a billion dollars of their funds in SVB, Chandrashekhar said.
Chandrashekhar this week met over 460 stakeholders, including startups affected by the SVB closure, and said he had conveyed their suggestions to Finance Minister Nirmala Sitharaman.
Indian banks could offer a deposit-backed credit line to start-ups that had funds in the SVB and use them as collateral, Chandrashekhar said, referring to one of the proposals he submitted to the finance minister.
India has one of the largest start-up markets in the world, achieving multi-billion valuations in recent years and gaining support from foreign investors who have made bold bets on digital and other technology businesses.
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