Following the recent collapse of the Silicon Valley Bank (SVB), the Indian government proactively approached a group of startups to assure them that the government is keen to help them handle the SVB induced crisis.
Union Minister of State for Skill Development & Entrepreneurship and Electronics & IT, Rajeev Chandrasekhar interacted with over 450 startups, owned/co-owned by Indians, venture capitalists (vcs), industry leaders and other stakeholders through video conferencing on March 14, 2023.
In his address during the online interaction, the Minister assured, “The Narendra Modi government is laser-focused on helping them tide over this crisis.” He emphasized that the Indian banking system was robust and suggested that they could explore using it, “Indian banking system is most stable & robust and you must explore it as part of your organisational framework. While startups have a natural incentive to use banks like SVB, we must figure out a way to use the Indian banking system without changing the business model,” he said.
The main concern raised by the attendees were the transfer of their US Dollar deposits to India and to US-based branches of Indian banks, among other issues. On the raised concerns, Chandrasekhar assured them the government would do everything possible to navigate the storm caused by the bank collapse.
Some suggestions were made by attendees to address the concerns, regarding which the Minister said, “We will share the list of suggestions with Finance Minister Nirmala Sitharaman and explore how best your concerns can be addressed. We will also explore how smoothly we can facilitate the transfer of your US dollar deposits to Indian banks, IFSC-centred foreign banks or any other Indian bank which has a presence in the United States.
The consultation was part of the government’s approach to address the situation and offer any assistance to members of India’s innovation and startup ecosystem who had financial holdings in SVB. Startups like Zoth.Io, Hatica.Io and VCs and financial service providers like Blume VC and Mirae Asset were part of the meet.
