Indian startups had around $1 billion worth of deposits with Silicon Valley Bank, which faced significant withdrawals from its depositors. On March 10th, California banking authorities closed down SVB after the withdrawal, causing the bank to become insolvent despite its $209 billion in assets as of 2022.

Although the US government intervened to ensure that depositors could access their funds, the startups are left to figure out how to transition to the Indian banking system instead of relying on the complex and uncertain cross-border US banking system in the upcoming months.

Late on Thursday night, India's state minister for technology, Rajeev Chandrashekhar, stated in a Twitter chat that they needed to discover methods to support startups that were affected by SVB's closure. According to Chandrashekhar's estimation, numerous Indian startups had more than a billion dollars of their funds in SVB. This week, he met with over 460 stakeholders, including startups impacted by SVB's closure, and conveyed their recommendations to Finance Minister Nirmala Sitharaman.

One of Chandrashekhar's proposals to the finance minister was that Indian banks could provide deposit-backed credit lines to startups that had funds in SVB, utilizing them as collateral. India has one of the world's most significant startup markets, with many companies earning multi-billion-dollar valuations in recent years and receiving support from foreign investors who have made significant bets on digital and other tech companies.


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