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Journalism of Courage
Officials at the Ministry of Electronics and IT (MeitY) are, on Tuesday, scheduled to meet start-ups that were impacted by the fallout of the troubled Silicon Valley Bank. One of the things on the agenda is to figure out if services available at the Gujarat International Finance Tech- City or GIFT City could be leveraged for start-ups to park their dollars.
“The meeting is about listening to start-ups’ constraints and encouraging them to use India’s banking system including discussions on how entities in the GIFT City could be used for USD deposits if that is what these firms need,” a senior government official told The Indian Express.
A number of private sector banks had also sprung into action to assist affected start-ups. In a statement, Ganesh Sankaran who is Axis Bank’s Group Executive & Head, Wholesale Banking Coverage Group, said that the bank was “actively engaging with these startups to help them park their funds at the GIFT city branch of Axis Bank”.
GIFT City has been conceptualised to be an international financial hub. It aims to be the financial and IT hub for the country. Fintech platforms have partnered with Banks such as RBL, ICICI and Kotak to set up these US$ banks in GIFT City.
Meanwhile, Indian start-ups said they could manage to withdraw their money that was stuck in their Silicon Valley Bank (SVB) accounts on Monday, courtesy a manoeuvre of the US government on Sunday night which allowed businesses with to have full access to their deposits, unlike a previous measure where only an insured amount of $250,000 would have been immediately accessible.
A founder of a start-up backed by the US-based technology accelerator YCombinator (YC) said that the process to withdraw the money was smooth, although the wait times were long given the increased load on the bank’s servers as businesses in India and around the world started withdrawing their money en masse.
For now, a number of these firms are wiring their money from SVB to another US-based bank’s account given that SWIFT transfers – a secure and standardised method of sending or receiving money from banks anywhere in the world – do not work for SVB accounts.
“You can’t do a SWIFT wire from an SVB account. So we’re all just wiring to another US Bank account and then deciding what to do. I’ve heard of other companies succeeding with wires. And we’ve so far had a great experience switching to Brex since we already had their credit card,” the founder quoted above said.
