Indian Entrepreneurs meet with Rajeev Chandrasekhar to discuss concerns regarding the collapse of SVB
Concerned about the impact of the Silicon Valley Bank (SVB) failure on the Indian start-up sector, Union Minister for State for Electronics and Information Technology Rajeev Chandrasekhar stated on Tuesday that he will raise the industry’s plight with the Union Finance Ministry.
The Minister, who met with start-ups online, informed the media that he would raise the plight of Indian start-ups affected by the SVB collapse with the finance ministry to help them recover from the crisis and address the urgent cash shortage they are experiencing.
More than 450 start-ups attended the event, including Zoth.Io, Hatica.Io, and VCs and financial service providers such as Blume VC and Mirae Asset. The minister also invited the start-ups to engage with the robust Indian financial system and assured them that any initial issues would be resolved.
The Minister indicated that he would share a list of ideas with Union Finance Minister Nirmala Sitharaman to determine the best approach to addressing these problems. He stated he will also examine ways to seamlessly ease the transfer of the US dollar deposits to Indian banks, IFSC-centred for international banks or any other Indian bank which has a presence in the United States.
The Minister also stated that for those start-ups whose deposits will be made whole but do not have access to them now, the authorities would investigate if credit lines in US dollars or Indian rupees could be made available. He also stated that they would investigate if new credit products similar to those offered in the US could be made accessible to impacted people, making it easier for them to switch from SVB to any other Indian bank in the US.
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The Minister mentioned that startups and venture capitalists have stated that while US government officials have told depositors that their money would be returned in full, there is no clarity on the timeline, which will cause a liquidity constraint among the enterprises affected by the SVB collapse. The minister concluded by stating that while some of the firms were able to move their cash to US-based banks, they are looking into methods to relocate their accounts to safer locations.
