New Delhi: Minister of State for IT Rajeev Chandrasekhar on Monday said that with the latest action by the US government Silicon Valley Banklooming risk for Indian Startup have passed, as he said the lesson for Indian startups from this crisis is to rely more on the Indian banking system.
The Biden administration has announced that depositors of the failed Silicon Valley bank will have access to their money starting Monday.
Chandrasekhar tweeted, “With this action by the US government, the looming risks to Indian startups are over. Lesson for Indian startups from this crisis – rely more on the Indian banking system.”
He added: “Thanks to PM @narendramodiji, FM @nsitharaman n @RBI for their constant leadership & monitoring.”
Last week’s Silicon Valley bank failure left many startups, tech companies, entrepreneurs and VC funds bewildered and upset, and the latest statement from the US government has given hope to depositors who had accounts at the beleaguered bank.
California-based Silicon Valley Bank (svb), the 16th largest bank in the United States, was shut down on Friday by the California Department of Financial Protection and Innovation, which subsequently appointed the FDIC as its receiver.
SVB was deeply entrenched in the tech startup ecosystem and the default bank for many high-flying startups; Its sudden downfall is one of the biggest bank failures since the global financial crisis of 2008.
The bank failed after clients – among them many venture capital firms and VC-backed companies that the bank had cultivated over time – began withdrawing their deposits, creating a run on the bank (most runs in more than one One of the big US bank) decade).
Bank runs occur when customers or investors begin withdrawing their money in a panic, leaving the bank unable to pay its obligations when due.
After receiving recommendations from the boards of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, and after consultation with the President, the Treasury Secretary Janet Yellen On Sunday the FDIC approved actions enabling the FDIC to meet its resolution for Santa Clara, California-based Silicon Valley Bank (SVB) that fully protects all depositors.
In a related development, the UK government announced on Monday that it has facilitated London-based banking major HSBC’s purchase of the troubled UK branch of the Silicon Valley bank for £1, giving it access to deposits of more than 3,000 customers worth around £6.7 billion. The amount is secured.
Diversified gaming and sports media platform Nazara Tech – whose two step-down subsidiaries have Rs 64 crore in deposits with Silicon Valley Bank – on Monday said the US administration’s statement on depositors’ protection for the entire amount is a “positive outcome”. and assures about recovery. of money.
The two subsidiaries have working capital to meet their requirements including payroll, said Nitish Mittersen, founder and CEO of Nazara Technologies, as he categorically ruled out the possibility of layoffs within the company due to the Silicon Valley bank crisis.
Most Indian software-as-a-services startups that have a presence in the US and firms associated with incubator Y Combinator are among the entities feeling the heat of the Silicon Valley bank collapse, though many industry players and experts feel Do note that the effect is likely to be short-lived.
Y Combinator-backed startups receive their payments in their accounts at SVB, but several Indian companies associated with incubators like Meesho and Razorpay were able to get their money out of the bank in time.
on Saturday, Vijay Shekhar SharmaPaytm’s top honcho had clarified that Silicon Valley Bank was one of its first investors, but that the bank had, long ago, sold off to other private investors “completely with an impressive return on its total investment of only $1.7 million”. had passed out”.
Sharma clarified in his tweet that currently SVB is not a shareholder.
Eklavya Gupta, founder and CEO of fintech firm Recur Club, had said that there are some sizable non-Y Combinator-linked SaaS companies on the West Coast, with operations in the US and India, that have significant investments in SVB.
Gupta said, “We are helping startups to open their account in GIFT City. We have a good partnership to help large companies meet their urgent need. There is better management and resources available to manage.” Recur Club has set up a pool of USD 15 million to help Indian entities meet their immediate spending requirement and capex payroll without diluting their equity.
Several venture capital firms reportedly advised portfolio companies to withdraw cash as a precaution. Reports suggest that startup founders in the US were worried about whether they would be able to make payroll, and some entrepreneurs whose funds are frozen in the bank are said to be turning to loans to tide over the situation. Was doing.
The Biden administration has announced that depositors of the failed Silicon Valley bank will have access to their money starting Monday.
Chandrasekhar tweeted, “With this action by the US government, the looming risks to Indian startups are over. Lesson for Indian startups from this crisis – rely more on the Indian banking system.”
He added: “Thanks to PM @narendramodiji, FM @nsitharaman n @RBI for their constant leadership & monitoring.”
Last week’s Silicon Valley bank failure left many startups, tech companies, entrepreneurs and VC funds bewildered and upset, and the latest statement from the US government has given hope to depositors who had accounts at the beleaguered bank.
California-based Silicon Valley Bank (svb), the 16th largest bank in the United States, was shut down on Friday by the California Department of Financial Protection and Innovation, which subsequently appointed the FDIC as its receiver.
SVB was deeply entrenched in the tech startup ecosystem and the default bank for many high-flying startups; Its sudden downfall is one of the biggest bank failures since the global financial crisis of 2008.
The bank failed after clients – among them many venture capital firms and VC-backed companies that the bank had cultivated over time – began withdrawing their deposits, creating a run on the bank (most runs in more than one One of the big US bank) decade).
Bank runs occur when customers or investors begin withdrawing their money in a panic, leaving the bank unable to pay its obligations when due.
After receiving recommendations from the boards of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, and after consultation with the President, the Treasury Secretary Janet Yellen On Sunday the FDIC approved actions enabling the FDIC to meet its resolution for Santa Clara, California-based Silicon Valley Bank (SVB) that fully protects all depositors.
In a related development, the UK government announced on Monday that it has facilitated London-based banking major HSBC’s purchase of the troubled UK branch of the Silicon Valley bank for £1, giving it access to deposits of more than 3,000 customers worth around £6.7 billion. The amount is secured.
Diversified gaming and sports media platform Nazara Tech – whose two step-down subsidiaries have Rs 64 crore in deposits with Silicon Valley Bank – on Monday said the US administration’s statement on depositors’ protection for the entire amount is a “positive outcome”. and assures about recovery. of money.
The two subsidiaries have working capital to meet their requirements including payroll, said Nitish Mittersen, founder and CEO of Nazara Technologies, as he categorically ruled out the possibility of layoffs within the company due to the Silicon Valley bank crisis.
Most Indian software-as-a-services startups that have a presence in the US and firms associated with incubator Y Combinator are among the entities feeling the heat of the Silicon Valley bank collapse, though many industry players and experts feel Do note that the effect is likely to be short-lived.
Y Combinator-backed startups receive their payments in their accounts at SVB, but several Indian companies associated with incubators like Meesho and Razorpay were able to get their money out of the bank in time.
on Saturday, Vijay Shekhar SharmaPaytm’s top honcho had clarified that Silicon Valley Bank was one of its first investors, but that the bank had, long ago, sold off to other private investors “completely with an impressive return on its total investment of only $1.7 million”. had passed out”.
Sharma clarified in his tweet that currently SVB is not a shareholder.
Eklavya Gupta, founder and CEO of fintech firm Recur Club, had said that there are some sizable non-Y Combinator-linked SaaS companies on the West Coast, with operations in the US and India, that have significant investments in SVB.
Gupta said, “We are helping startups to open their account in GIFT City. We have a good partnership to help large companies meet their urgent need. There is better management and resources available to manage.” Recur Club has set up a pool of USD 15 million to help Indian entities meet their immediate spending requirement and capex payroll without diluting their equity.
Several venture capital firms reportedly advised portfolio companies to withdraw cash as a precaution. Reports suggest that startup founders in the US were worried about whether they would be able to make payroll, and some entrepreneurs whose funds are frozen in the bank are said to be turning to loans to tide over the situation. Was doing.
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