How many deposits do Indian startups have in SVB? Minister answers

Indian startups had deposits worth about $1 billion with the troubled Silicon Valley Bank, and the country’s deputy IT minister said he had suggested local banks lend to them more going forward.

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.

ALSO READ: SVB collapse: Chandrasekhar calls for making the banking system more start-up friendly

Depositors withdrew as much as $42 billion in a single day, rendering it insolvent. The US government eventually stepped in to ensure depositors had access to all their funds.

“The question is how do we get startups to transition to the Indian banking system instead of relying on the complex cross-border US banking system with all its uncertainties in the coming month?” India’s Minister of State for Technology, Rajeev Chandrashekhar said late Thursday night in a Twitter spaces chat.

Hundreds of Indian startups had more than a billion dollars of their funds in SVB, by his estimate, Chandrashekhar said.

ALSO READ: Massive job cuts in India due to Silicon Valley Bank collapse? Experts say…

Chandrashekhar met more than 460 stakeholders this week, including startups affected by SVB’s closure, and said he had conveyed their proposals to Finance Minister Nirmala Sitharaman.

Indian banks could offer a deposit-backed credit line to startups that had funds in SVB, using them as collateral, Chandrashekhar said, referring to one of the proposals he had conveyed to the finance minister.

India has one of the world’s largest startup markets, with many reaching multi-billion dollar valuations in recent years and backed by foreign investors who have made bold bets on digital and other technology companies.