SVB crisis: Govt to look at ways to facilitate transfer of deposits to Indian banks, says Chandrasekhar
2 min read . Updated: 14 Mar 2023, 09:27 PM IST
Premium- Chandrasekhar said that for those startups whose deposits were going to be made whole, but have no access to it currently, the government will explore the option of whether any credit lines can be made available in US dollar or Indian rupees
NEW DELHI : Electronics and information technology minister for state Rajeev Chandrasekhar suggested that start-ups could explore ways to tap into the Indian banking system for funding without changing their business models, during his interaction with over 450 startups amid the collapse of Silicon Valley Bank.
“Indian banking system is most stable and robust and you must explore it as part of your organisational framework. While startups have a natural incentive to use banks like SVB, we must figure out a way to use the Indian banking system without changing your business model," he said during his interaction with start-ups that were owned or co-owned by Indians, venture capitalists, industry leaders and other stakeholders.
The consultation was part of the government’s approach to address the situation and offer any assistance to members of India’s innovation and startup ecosystem who had financial holdings in SVB. Startups like Zoth.Io, Hatica.Io and VCs and financial service providers like Blume VC and Mirae Asset were part of the meet.
On concerns around transfer of US Dollar deposits to India and to US-based branches of Indian banks, he said that these will be shared with finance minister Nirmala Sitharaman to arrive at possible solutions.
“We will share list of suggestions with Finance Minister Smt Nirmala Sitharaman and explore how best your concerns can be addressed. We will also explore how smoothly we can facilitate the transfer of your US dollar deposits to Indian banks, IFSC centred foreign banks or any other Indian bank which has presence in the United States," he said.
He added that for those startups whose deposits were going to be made whole, but have no access to it currently, the government will explore the option of whether any credit lines can be made available in US dollar or Indian rupees.
“We will also try to see if more credit products like in the US, can be made available to you and make it easier for them to move from SVB to any other Indian Bank in the US," he said.
Mint had reported on Tuesday that Indian startups with accounts at the beleaguered bank had trouble moving funds out of the bank on Monday morning because international wire transfers were suspended due to a heavy load on the banking system.
SVB has been providing start-ups access to credit which are otherwise not considered safe by traditional banks. For tech companies and investors the bank has been of critical importance globally.
