The parent firm of SVB Bank has filed for bankruptcy
New Delhi:
The parent firm of US lender Silicon Valley Bank has filed for bankruptcy, nearly a week after US authorities swooped in and seized the bank’s assets following a run on deposits, which made it no longer tenable for the medium-sized bank to stay afloat on its own.
The bankruptcy process will be separate from the sale of Silicon Valley Bank’s (SVB) assets by the Federal Deposit Insurance Corporation (FDIC), an independent agency that maintains stability and public confidence in the US’s financial system.
Little known to the general public, SVB specialised in financing startups and had become the 16th largest US bank by assets: at the end of 2022, it had $209 billion in assets and approximately $175.4 billion in deposits.
Its collapse represents not only the largest bank failure since Washington Mutual in 2008, but also the second largest failure ever for a retail bank in the US.
Hundreds of Indian startups had more than a billion dollars of their funds in SVB, Union Minister Rajeev Chandrashekhar said.
Mr Chandrashekhar said he met more than 460 stakeholders this week, including startups affected by SVB’s closing, and said he had passed on their suggestions to Finance Minister Nirmala Sitharaman.
Indian banks could offer a deposit-backed credit line to startups that had funds in SVB, using those as collateral, Mr Chandrashekhar said, citing one of the suggestions he had passed on to the Finance minister.
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