At least three Indian banks—Axis Bank, Kotak Mahindra Bank, and ICICI Bank—along with the Indian unit of HSBC, assembled crack teams to work through the weekend to assist startups affected by the collapse of Silicon Valley Bank open new dollar accounts in Gujarat’s Gift City, which caters to non-residents and offshore entities.
The banks set up specialized teams to assist startups in moving funds to their branches in Gift City when a freeze on transactions is lifted for Silicon Valley Bank.
After a run on the bank on Thursday and Friday, US regulatory authorities led by the California Department of Financial Protection and Innovation shut down SVB and appointed the Federal Deposit Insurance Corp. (FDIC) as a receiver.
Due to SVB’s startup-friendly policies, most US startups, and many Indian startups with US subsidiaries, banked exclusively with the bank. Deposits of significant capital from fundraises also tended to be parked with the bank.
They temporarily lost access to their accounts and those deposits after the bank was shut down on Friday night. Some startups took preemptive action hours before US authorities took charge by transferring funds aided by the Indian banks. Not everyone succeeded.
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