Indian startups had deposits worth $1 billion in the beleaguered California-based Silicon Valley Bank, MoS IT Rajeev Chandrasekhar informed while addressing a Twitter Spaces session, on Thursday.

“I had empirically and anecdotally calculated that there was 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. He added that the Prime Minister’s Office, the finance ministry and the Reserve Bank of India were monitoring the situation as soon as the crisis began to unravel last week.

Chandrasekhar held a consultation with more than 450 representatives of the startup and investor ecosystem on Tuesday to assess the impact of the Silicon Valley Bank collapse. Following this consultation, 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. “There is a need for the Indian banking system to consider Indian startups as an important client base and a target segment”.

On a question about what specific recommendations have been sent to the finance ministry, he said that the government also needs to create more awareness within the startup community about Indian banks, and about the International Financial Services Centre (IFSC) at Gujarat’s GIFT City.

Banks in GIFT City allow customers to open foreign currency accounts for international transactions. RBL Bank, ICICI Bank, Kotak Mahindra Bank, Axis Bank and HSBC are working with startups to open accounts in GIFT City.

Chandrasekhar also said that by some estimates, almost $200 million has been moved by startups from Silicon Valley Bank to GIFT City“The fact that we have branches in the US of State Bank of India, Bank of Baroda and many other public sector banks who do corporate banking but do very little corporate banking with startups. That for me makes little sense because if startups are banking and have deposits worth in excess of a billion dollars in Silicon Valley Bank, it could certainly be SBI New York, or Bank of Baroda New York,” the minister said. “We also have to create more awareness within the startup community about Indian banks. We have to create more awareness about the IFSC Gift City banks”.

The minister added that he expects a significant portion of the crisis to be over by the end of this week, but added that the government was now working to make these Indian startups transition to the Indian banking system.

Silicon Valley Bank in all had $209 billion in total assets and about $175.4 billion in total deposits, as of December 2022.

Chandrasekhar, on Monday, had tweeted in support of the US government’s intervention in the Silicon Valley Bank crisis to protect the interests of the depositors and the startup community.

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