The Government on Thursday said that the Silicon Valley Bank (SVB) crisis with the Indian start-ups may last till this weekend only, exactly a week since it started. Interacting with affected start-ups, the Minister of State for Electronics and IT Rajeev Chandrashekhar urged them to move towards the Indian banking system which would, in time, transition to be a lot more start-up-friendly. The Minister pointed at the transfer of bank deposits worth over $200 million to GIFT City, Gujarat -- a sign of the Indian banking system’s growing prominence.
“I have heard that Nazara Technologies has reported to the stock exchange that they have managed to get all the money out of SVB. So I suspect that by the end of this week, which is exactly a week since the crisis started, a significant part of the crisis would have in a sense blown over,” Rajeev Chandrasekhar said.
‘Now is the time’
The Minister had an interactive session on Twitter Space late Thursday evening. Speaking with candour, he said that now was the time to make start-ups transition to the Indian banking system and use the Indian banking system more rather than depend on such a complex cross-border US banking system in the coming months.
He said the reason for the start-ups or any other company going for the US banking system was because they had a long record of good service and good products/credit products.
“So, I think part of it is that relationship, the aura, the brand reputation of the SVB. All of that played a role. Secondly, I think certainly a case can be made and I have made that case to the honorable Finance Minister yesterday, when I sent her a summary of the consultation that the Indian banking system can be a lot more let us say, start-up-friendly,” Chandrasekhar said.
He also spoke about the transfer of bank deposits worth over $200 million to GIFT City, Gujarat — a sign of the Indian banking system’s growing prominence.
Special provisions available at Gift City can be quick and impactful support for Indian start-ups. “Today, what is attractive about the banking system is not their appetite to take risks. Instead, it is their prudency which makes them strong. What start-ups are looking for is not risk or risky instruments, instead, they are looking for safe havens where capital can be deposited,” he added.