While 16.75% of the respondents did not agree with this view, about 8.63% of the voters could not decide.
Indian startups have taken various measures to remove their deposits from the beleaguered SVB amid growing calls from industry experts and the government to work with local banks.
ET reported on April 3 that banking units at the International Financial Services Centre (IFSC) in Gujarat’s Gift City emerged as one of several options for startups and tech companies, which had their funds temporarily frozen at SVB.
Apart from Gift City, startups have also moved their funds to other banks in the US, India, and to overseas locations of Indian lenders, based on their customer and supplier presence, said several startup and banking ecosystem executives.
“We have had over 40 companies open and send funds to Gift City accounts. We know of around $30-40 million that startups have transferred,” Harshil Mathur, chief executive officer of fintech company Razorpay, told ET.
Discover the stories of your interest
To put it simply, Indian tech startups with a limited client or supplier presence in the US have been moving their money out of the US to Indian bank accounts via transfer pricing. Those that need USD bank accounts to make or collect payments are the ones that have opted for accounts in either US banks or Gift City accounts.However, not everyone is readily accepting this change.
“We moved our funds from SVB to other banks in the US itself. I have my reservations around Gift City in terms of what new regulations may or may not come up from the RBI’s end on it in future,” said Shachin Bharadwaj, cofounder and CEO of Los Angeles-based Zeno Collectibles, which has a base in Los Angeles.
Government recommendations
After the SVB debacle, minister of state for IT (MoS IT) Rajeev Chandrasekhar met with more than 450 startup and investor ecosystem representatives to assess the impact of the collapse. Following that, he wrote a letter to finance minister Nirmala Sitharaman with a set of suggestions to help startups wade through the crisis.
“There is a case to be made — and I have made this case to the finance minister yesterday when I sent her a summary of the consultations — that the Indian banking system can be a lot more startup-friendly by servicing and supporting startups with the same alacrity and quality that they provide to multibillion-dollar companies,” Chandrasekhar said.
In addition, he also recommended that startups trust the Indian banking system more.
“With this US govt action, looming risks to Indian Startups hv passed Learning for Indian Startups from this crisis – trust Indian banking system more,” Chandrasekhar had tweeted (tweet reproduced verbatim).
During a Twitter Spaces session, the minister said Indian startups had deposits worth $1 billion in SVB.
“I had empirically and anecdotally calculated that there were more than a billion dollars of startup capital as deposits — according to some this is a conservative estimate — in Silicon Valley Bank, attributable to Indian startups,” he said.