How the Closure of Silicon Valley Bank Affects Indian Startups and the Country’s Startup Ecosystem
Indian startups may be impacted by the recent closure of Silicon Valley Bank (SVB), which had deposits worth around $1 billion from hundreds of Indian startups. The bank was shut down by California banking regulators on March 10 after depositors withdrew as much as $42 billion on a single day, rendering the bank insolvent. In response to the situation, India’s state minister for technology, Rajeev Chandrashekhar, has suggested that local banks should lend more to startups, rather than depending on the complex cross-border US banking system. Chandrashekhar has passed on his recommendations to Finance Minister Nirmala Sitharaman. This could help Indian startups transition to the Indian banking system and ensure they have access to funding they need, even in times of crisis. Foreign investors have made bold bets on digital and other tech businesses in India, contributing to the growth of the country’s startup ecosystem.