Union minister of state for skill development and entrepreneurship and electronics and IT Rajeev Chandrasekhar on Tuesday interacted with over 450 startups, owned/co-owned by Indians, Venture Capitalists (VCs), Industry leaders and others stakeholders on the collapse of Silicon Valley Bank through video conferencing. He assured that the government is laser-focused on helping them tide over this crisis.
This 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.
The minister said the Indian banking system was robust and suggested that they could explore using it.
“Indian banking system is most stable and 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 your business model,” he said.
Startups like Zoth.Io, Hatica.Io and VCs and financial service providers like Blume VC and Mirae Asset were part of the meet.
Though startups and venture capitalists said that the US government authorities have assured of returning full money to the depositors, there is no clarity on the timelines, which will lead to a liquidity crunch in the firms that have been impacted by the SVB collapse, according to the minister.
Most of the Indian software-as-a-services startups with a presence in the US and firms linked to incubator Y Combinator are among those entities who are feeling the heat of the SVB collapse.
Some of the concerns that were shared by the attendees included transfer of their US Dollar deposits to India and to US-based branches of Indian banks, among other issues.
The minister assured them the government would do everything possible to navigate the storm caused by the bank collapse.
“We will share a 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 presence in the United States,” Chandrasekhar added.
The minister also said that for those startups whose deposits were going to be made whole, but have no access to it currently.
“We will explore the option of whether any credit lines can be made available in US dollar or Indian rupees. We will also try to see if more credit products like in the US, can be made available to you and make it easier for them to move from SVB to any other Indian Bank in the US.”
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