With the US Government allowing Silicon Valley Bank depositors to withdraw funds, Y Combinator-backed Indian start-ups domiciled in the States have deposited around $60 million-$70 million in GIFT City so far.

Sources in the fintech ecosystem told businessline that with no alternative options for banking, GIFT City is emerging as a popular destination for most start-ups to deposit funds.

“Start-ups have deposited around $60 million-$70 million in US$ accounts in GIFT City since Monday ... we expect this number to go up to $100 million-$150 million by the end of this week,” said the fintech executive. 

businessline reported on Monday that GIFT City is emerging as a popular destination for Indian founders desperate to park funds withdrawn from SVB. 

Sachin Bharadwaj, Co-Founder of Zeno Collectibles said, “for start-ups that do not have alternative banking partners in the US, GIFT City is the only option. The KYC process for big banks in the States has to be done in person, which can be onerous for founders not residing in the country. In comparison, GIFT City has a more streamlined and swift KYC process.” Bharadwaj has parked his funds in Brex, an American financial company, where his start-up had a bank account. 

Also read: Silicon Valley Bank collapse to impact Indian start-up ecosystem: Experts

Founders have opened accounts in GIFT City since it allows them to park funds without bringing it into the country. 

However, some are not too clear on the necessary compliances and have sought clarity from the Centre and the RBI on the matter. 

Local banks such as Kotak and ICICI have partnered fintech platforms to open accounts in GIFT City, Gujarat.