How the collapse of Silicon Valley Bank affected the 116-year-old Indian bank

New Delhi:

collapse of silicon valley bank, the biggest retail banking failure since the global financial crisis, has triggered a wave of implications, the extent of which has yet to be explored. An unexpected victim of American Bank’s sudden demise is a 116-year-old co-operative bank in Mumbai, 13,000 km away.

Mumbai’s SVC Co-operative Bank issued a clarification on Twitter on distancing itself from the US startup’s lead lender. “SVC Bank is not wholly related to Silicon Valley Bank (SVB) which was based in California. We request our members, customers and other stakeholders not to pay attention to baseless rumors and similarity of brand names by unscrupulous elements do mischief by accusing

The bank said that it reserves the right to take appropriate legal action against those spreading rumors to tarnish its brand image.

Important Announcement#HumSeHaiPossible#svcbank#banking#SVC#Important Announcementpic.twitter.com/p05lHBJm9w

– SVC Bank (@SVC_Bank) March 11, 2023

ZyppElectric CEO Akash Gupta replied to the tweet, writing, “The next SLB (Sanjay Leela Bhansali) can give a statement on this matter. India is amazing.” Another user wrote, “Situation of our fellow Indians and WhatsApp University. Great that SVC really gave this important clarification, congrats to you!”

Needless to say, the SVC, established in 1906, has no apparent connection with the US-based Silicon Valley Bank Which was shut down by California’s banking regulators on Friday. The move came after a dramatic 48 hours that saw the hi-tech lender’s share price slide amid a run-on deposit by concerned customers.

The collapse of SVB, which specializes in venture-capital financing, has sent Shockwaves in global markets, About $175 billion of the bank’s customer deposits are now under the control of the Federal Deposit Insurance Corporation, or FDIC, assuring depositors full access to their insured deposits after all bank branches reopened Monday morning.

SVB’s problems were compounded by customer withdrawals, which prompted the company to liquidate positions in securities whose values ​​had declined due to Federal Reserve interest rate hikes. The sharp jump in interest rates meant that the securities they had bought were selling at a much lower price.