‘Govt to aid dollar deposit transfers to Indian banks’

“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 the business model.” Chandrasekhar was interacting with 450-plus startups owned or co-owned by Indians, venture capitalists, industry leaders, and other stakeholders, following the collapse of the Silicon Valley Bank (SVB).

The consultation was part of the government’s approach to address issues and offer assistance to India’s startups ecosystem including those who had financial holdings in SVB, such as Zoth.Io, Hatica.Io and venture capital firms and financial service providers like Blume VC and Mirae Asset.

On concerns around transfer of dollar deposits to India and to US-based branches of Indian banks, he said these will be shared with the finance minister for possible solutions. “We will share the suggestions with finance minister Nirmala Sitharaman and explore how best your concerns can be addressed. We will 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 US,” he said.

For startups whose deposits were going to be made whole, but have no access to it currently, the Centre will explore the option of whether credit lines can be made available in US dollar or the rupee, he said.

“We will try to see if more credit products like in the US can be made available and make it easier to move from SVB to any other Indian bank in the US.”

On Tuesday, Mint reported that startups with accounts at the beleaguered SVB had trouble moving the funds out of it on Monday with international wire transfers having been suspended due to a heavy load on the banking system.