Indian Startups Have Deposits Worth $1 Billion In SVB, Says Rajeev Chandrasekhar

During a Twitter live session, Chandrasekhar said he heard that over $200 million of startups' deposits have been transferred to GIFT City bank

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By Teena Jose

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Union minister Rajeev Chandrasekhar has said that said deposits close to $ 1 billion attributable to Indian startups were with the US-based Silicon Valley Bank (SVB), according to a PTI report. During a Twitter live session, Chandrasekhar also said that he heard that over $200 million of startups' deposits have been transferred to GIFT City bank.

"I had kind of very empirically and anecdotally calculated that there was more than a billion dollars of startups' capital as deposits. According to some, this is a conservative estimate. There were deposits in SVB that are attributable to Indian startups close to a billion or more," said Chandrasekhar in a statement.

According to the report, Chandrasekhar also said that he has taken up the issue of SVB failure with the Finance Minister on Wednesday and pitched for fine-tuning the Indian banking system as per the requirement of startups.

"There is a case to be made–and I have made this case to the finance minister yesterday when I sent her a summary of the consultations– hat the Indian banking system can be a lot more startup friendly by servicing and supporting startups with the same alacrity and quality that they provide to multibillion dollar companies. There is a need for the Indian banking system to consider Indian startups as an important client base and a target segment," said the minister.

Regarding the SVB collapse, Jyoti Prakash Gadia, managing director at Resurgent India, A SEBI Registered category one merchant bank, has responded that, "Several startups in the US have invested in Indian startups and also some Indian startups have overseas subsidiaries. All such entities who have either deposit with SVB or any other relationship in the form of debt or investments will face uncertainty and a likely loss depending on the size of deposits and other transactions. The companies in the tech and life sciences sectors are likely to be most impacted as such sectors had major deals with SVB. Some of the Indian banks are already reported to be in touch with such companies affected by the SVB episode to assist them to tide over the crisis. The general market sentiments have also been impacted due to the suddenness of the debacle and its likely impact on global markets in the short to medium term A lot will depend on the further actions of the US regulators and the government as regards the resolution process and the bailout package if any. All in all the startup ecosystem will need to keep its fingers crossed and show agility in taking the future steps in the right direction with an emphasis on strong fundamentals instead of reliance on speculation."

Teena Jose

News Desk Reporter with Entrepreneur India

Teena is a post graduate in financial journalism. She has an avid interest in content creation, digital media and fashion.

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