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The US government’s ban on bank withdrawals on March 13 has created a problem for consumers. According to some media reports, 20 to 8 crores of 40 startups and more than 8-8 crores of 20 startups are stuck in the bank. In such a situation, it is seen that the work of these new businesses is also affected because money is stuck. Meanwhile, looking at the current state of Indian startups, the Indian government has invited startup founders for a discussion next week. Significantly, if the ban on bank withdrawals continues, Indian startups may also face difficulties in paying their employees.
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The biggest banking crisis in a decade and a half
This is the collapse of any major financial institution since the collapse of Washington Mutual America about 15 years ago. Silicon Valley Bank invests in many startups. Silicon Valley Bank was one of the first institutions to invest in Paytm. However, now they have no stake in Paytm. The bank has been hit hard by the aggressive approach taken by the Federal Reserve in policy interest rates and has been facing financial pressure since last year.
SVB Crisis: A Growing Threat; Avoid Silicon Valley Bank, hang a sword on Indian startups
Cause of bank failure
Given the financial condition of the bank, the California Department of Financial Protection and Innovation decided to close the bank. Silicon Valley Bank is the 16th largest bank in the United States with total assets of over $210 billion and branches in many cities across the country. According to experts, the bank had bought billions of dollars worth of bonds over the years using customer deposits. However, due to a sudden increase in interest rates, the value of these bonds fell. As interest rates increased, the bank’s position deteriorated and eventually the bank failed. Silicon Valley Bank provides funding to technology companies and new ventures (business ideas).
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