A little-known Indian bank found itself caught up in the chaos that followed the sudden collapse of US lender Silicon Valley Bank (SVB) — because of a similarity in names.
Over the weekend, India’s SVC Co-operative Bank (SVC Bank) rushed to calm panicked depositors after they mistook it for the California based start-up funder.
One user asked SVC about “rumours about bank default”, tagging the bank on Twitter. The Indian lender responded: “You have got the Twitter handle wrong.”
The 116-year old bank also posted a statement on Twitter in an attempt to assuage user concerns over its financial health.
“We request our members, customers and other stakeholders not to pay attention to baseless rumours and mischief-mongering … insinuating similarities in brand names,” SVC said in the statement.
— SVC Bank (@SVC_Bank) March 11, 2023
The bank also sent text messages in English and local Marathi language to its customers in Mumbai saying it has no relation to the collapsed SVB.
SVC, which has 198 branches across India, held total deposits of $2.23 billion in 2021-22. The statement said SVC has “robust and strong fundamentals”.
‘Social media rumours’
Sachin Mane, branch manager at one of SVC’s branches near India’s financial capital Mumbai told Reuters on Monday the lender acted as there were rumours circulating on social media about the bank’s financial health.
“There were a few queries from customers but it mostly came from social media rumours … We wanted to communicate before lot of people started asking or before it became a big issue,” said Mane.
“It’s just confusion.”
California banking regulators shut down SVB on Friday after a run on the lender, which had $209 billion in assets at the end of 2022, with depositors pulling out as much as $42 billion on a single day, rendering it insolvent.
There were no scenes of panic at two SVC branches in Mumbai suburbs that Reuters visited on Monday, with account holders carrying on usual banking activities.
One account holder showed Reuters a text message he received from SVC which asked them to not believe any rumours.
“SVC Co-operative Bank Ltd. has no relation with Silicon Valley Bank in California,” it stated.
- Reuters, with additional editing by Vishakha Saxena