Over $1 billion in deposits of Indian startups was stuck in SVB: MoS IT Rajeev Chandrasekhar

The Silicon Valley Bank (SVB) crisis, even if it has blown over slightly, continues to be a conversation in business circles. Addressing a Twitter townhall this evening, Minister of State for IT Minister Rajeev Chandrasekhar shared that over a billion dollar worth of capital “attributable to Indian startups” was stuck in deposits at SVB when it went down. “And this is a conservative estimate. Several hundred startups were directly impacted and funds that invested in them were also impacted,” the minister said.

Chandrasekhar also shared that over $250 million have been transferred from SVB to GIFT City banks in the last few days. “There is newfound awe and respect for the Indian banking system,” he said. 

Earlier this week, Chandrasekhar also held a consultation with 460+ Indian startups to understand and assess the full impact of the SVB crisis. “I’ve submitted a report on the consultations to the Finance Minister. We need to see how we can move Indian startups to the Indian banking system instead of relying on complex cross-border systems,” he explained.

According to the minister, the Indian banking system can be a lot more “startup-friendly” and service them with the same alacrity that they service multi-billion dollar companies. “Indian banks too need to consider Indian startups as an important client base,” he added.

Also read: Silicon Valley Bank collapse: What lies ahead for start-up ecosystem after SVB?

Earlier this week, ICICI Bank was one of the first major banks to offer ‘Startup Ecosystem Banking’ to Indian startups in the wake of SVB’s collapse. The Bank has also put in place a dedicated team for startups that serves them through an extensive network of branches. 

"The ‘Startup Ecosystem Banking’ proposition offers treasury and transaction banking solutions, lending solutions, digital integrations, handling FDI and regulatory compliances, personal banking services for employees and founders,” ICICI Bank said in a statement. 

Stressing further on the need for Indian banks to develop products and services for startups, the minister said, “SBI, Bank of Baroda, and many public sector banks have branches in the US. They do corporate banking but very little banking with startups. We have to create more awareness within the startup community about Indian banks, and vice versa in the banking community to spotlight the opportunity that startups represent.”