Back‘$200 mn from SVB moved to GIFT City’
Due to restrictions on overseas transfers from SVB accounts, most Indian companies that had parked funds overseas moved them to other US banks
PremiumAbout $200 million of the $1 billion funds held by Indian startups in Silicon Valley Bank (SVB) were transferred to GIFT City, a global financial centre located in Gujarat, after the US lender collapsed, Rajeev Chandrasekhar, minister of state for electronics and information technology, said in an interview.
The minister said that the crisis triggered by the bank’s collapse is now a more manageable short-term liquidity issue instead of an existential solvency crisis faced by startups with money stuck in the bank.
“There is over $1 billion-plus of deposits that Indian startups have in Silicon Valley Bank. As of this (Thursday) morning, about $200 million odd of those deposits have moved to the GIFT City, IFSC," the minister said in a fireside chat at the Lenovo Tech World on Thursday.
Mint reported earlier this week that Indian startups with accounts at SVB had trouble moving funds out of the bank because international wire transfers were suspended.
Due to restrictions on overseas transfers from SVB accounts, most Indian companies that had parked funds overseas moved them to other US banks. Some Indian startups, especially those with international operations, wanted to move some money out of SVB to another overseas bank or to an Indian bank registered with GIFT City.
The minister said that the American banking system was not the ‘gold standard’ that it was being considered and that Indian startups should look closer home for funding their financing needs.
“I think at the end of the day, there was a tendency for us historically to look at the American financial sector as the gold standard. Turns out it’s not. The Indian banking system and the Indian financial sector are more resilient and stronger, and it should be the preferred banking partner for startups," he said.
In response to a question on the investments by players in the semiconductor space, Chandrasekhar said that the government was soon going to give approval to the first semiconductor fabrication investment and the first packaging proposal in the semiconductor segment.
“We are certainly on course to very shortly announce a fab investment being approved by the government of India and a packaging investment being also approved," he said, without giving details.
He added that the government would also announce an India semiconductor research centre, creating capabilities and capacities at the leading edge of research in certain areas.
The minister said the government was planning to hold an India Stack global conference in May, where at least 7-8 countries will sign up to implement the India Stack in their governments and ecosystems. He added that such implementation would help smaller countries who don’t want to invest billions of dollars, the ability to come right up to the same levels as every other nation.
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