Indian companies will be affected by the closure of Silicon Valley Bank! read report
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New Delhi : After the closure of America’s largest Silicon Valley bank, it is expected to have a deep impact on Indian companies as well. After the collapse of Lehman Brothers in the year 2008, the whole world had to face economic recession. Now after a decade, once again a banking crisis has arisen in America. It is being discussed in media reports that the effect of the closure of Silicon Valley Bank can be seen on India’s startups and technology sector. The reason for this is being told that India’s major information technology (IT) companies and startups have invested in this bank, due to which its effect is expected to be visible on the Indian stock market next week.
Deposits of IT companies and startups in SVB
According to a report in the English newspaper Indian Express, when the closure of America’s largest Silicon Valley Bank (SVB) was announced late on Friday, India’s startup founders were in a tizzy. The main reason behind her being upset is being told that she had an account with Silicon Valley Bank and has deposited more than $2,50,000 in this bank. However, the Federal Deposit Insurance Corporation (FDIC) has been appointed receiver on behalf of the US bank regulators. The FDIC has assured them that their deposits are insured and companies with accounts over $250,000 can contact the toll free number.
89% of $75 billion in deposits not insured
The report states that the IT industry is the largest client of Silicon Valley Bank and includes a large number of Indian startups. In particular, startups providing software as a service are included. These startups provide services to the US customers of the bank. A founder of Indian startups told on Saturday that we have about $ 2 million in our SVB account. We are continuously contacting on toll free number. On the other hand, the FDIC issued a press release saying that the bank’s depositors will have access to their insured deposits by Monday, March 13. However, data presented by the bank to the FDIC at the end of 2022 mentions that about 89 per cent of its $175 billion deposits are uninsured.
why the bank closed
Let us tell you that the bank was ordered to be closed on Friday by California’s Bank Regulatory, Financial Protection and Innovation Department. According to the order, at the close of business on March 9, Silicon Valley Bank had approximately $958 million in cash remaining. The order highlights the scale of bank operations faced by the lender, which was placed in receivership of government regulator Federal Deposit Insurance Corp. The scale of the withdrawal attempt from the investors was so huge that the bank ran out of cash.
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