Silicon Valley Bank meltdown: ICICI Bank floats start-up ecosystem banking

Private sector lender ICICI Bank has said that it will offer a comprehensive bouquet of digital and physical solutions to cater to all banking needs of start-ups across their various life stages. The step has been taken to help start-ups in India in moving their funds out of Silicon Valley Bank (SVB). The bank, which till last week was one of the most-popular banks focused on start-ups, closed on Friday after it suffered a swift collapse, sending shock waves across the tech and banking industries.

As part of the Start-up Ecosystem Banking, ICICI Bank has set up a dedicated team for start-ups that would serve them through an extensive network of branches.
ICICI Bank has said that it will offer these innovative solutions through a network of domestic and international branches in India and in New York, Toronto, London, Dubai, Singapore, and Hong Kong. A dedicated branch at GIFT City in Gujarat has been set up, a press statement issued by the bank said. As per Indian government rules, Gift City is regulated by the International Financial Services Centre Authority and allows companies to move funds in foreign currency, including the dollar.

The Start-up Ecosystem Banking proposition of the bank will also offer treasury and transaction banking solutions, lending solutions, digital integrations, handling FDI and regulatory compliances, personal banking services for employees and founders.

Also read: Silicon Valley Bank collapse: What buffer do Indian banks have against the rising domestic interest rates?

“India has emerged as the third largest start-up ecosystem in the world, underlining the country’s vibrant and innovative startup culture. Through our comprehensive ‘Startup Ecosystem Banking’, we support the emerging requirement of Indian startups and aim to become the preferred bank of choice in their growth journey,” said Rajesh Rai, Business Head- West & South, Branch Banking, ICICI Bank.

At the GIFT City branch, the bank will offer the digital opening of Global Foreign Currency Current Account (GFCCA) for overseas holding companies and subsidiaries of Indian start-ups.

This can be done seamlessly within one working day of submission of required documents, which is significantly lower than the industry practice of at least five days.

In addition to the above facilities, Ecosystem Banking further helps startups to open Special Non-Resident Rupee (SNRR) account as well as create deposits in both US Dollar and in Indian Rupee.

The start-ups can also avail escrow, custody services and forex solutions for seamless and efficient capital flows, the press statement said.

The bank is offering state-of-the-art digital channels namely Corporate Internet Banking (CIB), InstaBIZ mobile application, Trade Online for trade-related transactions, Integrated Payment System platform to facilitate vendor and tax payments, and solutions for e-collections and e-mandates.

Further, the bank has developed an API Developer Portal, with over 250 APIs, enabling startups to co-create innovative customer solutions in a frictionless manner.

Watch: Several Start-Ups Bank With Doomed SVB

Also read: Silicon Valley Bank domino effect: Do Indian investors have anything to worry about after SVB fallout?

Other bank helpdesks

To help crisis-struck start-ups, Axis Bank, Kotak Mahindra Bank, RBL Bank, Indian unit of HSBC have set up crack teams after the collapse of Silicon Valley Bank. These banks have opened new dollar accounts in Gift City, which caters to non-residents and offshore entities.

The banks have said their specialised teams will assist startups in India in getting back their funds to their branches in Gift City when the US regulators will remove the freeze on transactions for Silicon Valley Bank.

“In the backdrop of the SVB collapse, we saw an opportunity to help the start-ups that could have been impacted by it,” Ganesh Sankaran, head of the wholesale banking coverage group at Axis Bank told ET. “Many financial sponsors have connected us with their portfolio companies who would be keen to explore our Gift City proposition,” he added.

The lender is already in talks with startups in B2B ecommerce, large online car marketplace and food tech who want to move funds to its Gift City branch, Sankaran added.

SVB, a key lender to start-ups across the US since the 1980s, was shut down on Friday and was taken over by the Federal Deposit Insurance Corporation (FDIC). FDIC created the new entity, Silicon Valley Bank N.A., and said that the existing and new deposits of the collapsed bank will be protected by the US financial regulator.

FDIC provides insurance of $250,000 on each bank deposit, but SVB filings stated that 97 per cent of its deposits held capital more than that.

Earlier on Tuesday, SVB N.A's new CEO Tim Mayopoulos said that the lender is open to conduct business as usual. The bank is all set to conduct business as usual within the US and is expected to resume cross-border transactions in the coming days.

Also read: Silicon Valley Bank crisis: What Indian start-ups exposed to SVB are doing to get their money back

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