Indian startups have around $1 billion deposits in Silicon Valley Bank: MoS IT Rajeev Chandrasekhar

Indian startups had deposits worth around $1 billion (about Rs 8,250 crore) with the beleaguered Silicon Valley Bank and the country’s deputy IT minister said he had suggested banks local authorities 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 (around 17 lakh crore) in assets at the end of 2022.

Depositors withdrew up to $42 billion (about Rs. 3.4 lakh crore) 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 Chandrasekhar, 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.

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 backing from overseas investors, who have made bold bets on digital and other technology ventures.

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