Hundreds of Indian startups had more than a billion dollars of their funds in embattled Silicon Valley Bank, said the country’s deputy IT minister. he added that he has suggested to local banks that they need to lend more to the startups in the future.
“The issue is, how do we make startups transition to the Indian banking system, rather than depend on the complex cross border US banking system with all of its uncertainties…?” India’s state minister for technology, Rajeev Chandrashekhar said late Thursday night in a Twitter spaces chat.
Chandrashekhar met more than 460 stakeholders this week, including startups affected by SVB’s closing. He said he had passed on their suggestions to Finance Minister Nirmala Sitharaman.
Indian banks could offer deposit-backed credit lines that used the funds the startups had with SVB as collateral, Chandrashekhar said, citing one of the suggestions he had passed on to the Finance minister.
Shri Rajeev Chandrashekhar (@Rajeev_GoI), Hon’ble MoS MeitY, speaking on the SVB impact on Indian Startups.https://t.co/fpXMzMqvvD#DigitalIndia #Aatmanirbharbharat #IndiaTechade #Startup #StartupIndia #IndiaSupports
— NIXI (@inregistry) March 16, 2023
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 pulled out as much as $42 billion on a single day, rendering it insolvent. The US government eventually stepped in to ensure that depositors had access to all their funds.
India has one of the world’s biggest startup markets, with many clocking multi-billion-dollar valuations in recent years.
Many Indian start-ups are backed by foreign investors, who have made bold bets on digital and other tech businesses.
- Reuters, with additional editing by Vishakha Saxena