Billions of dollars of investors’ or companies’ assets are stuck due to the crisis at Silicon Valley Bank. Dramatically, SVB which is a lender to some of the well-known tech giants, unicorns and start-ups has been shut down due to concerns of low cash availability. This caused a storm in many companies that were trying to get their money out of SVB. However, the task is difficult and uncertain. Stir in companies! Nevertheless, the Federal Deposit Insurance Corporation (FDIC) has created a bank that will protect both insured and uninsured depositors in the SVB.
post off Silicon Valley BankThe California Department of Justice has appointed the FDIC as receiver.
FDIC made deposit on March 10 Insurance National Bank of Santa Clara (DINB).
In a statement on March 10, the FDIC said, “At the time of closing, the FDIC as receiver immediately transferred all of Silicon Valley Bank’s insured deposits to DINB.”
According to the FDIC, all insured depositors will have full access to their insured deposits as of Monday morning, March 13, 2023.
But what about uninsured depositors?
The FDIC plans to pay advance dividends to uninsured depositors within the next week. In addition, these uninsured depositors will receive a receipt certificate for the balance amount of their uninsured money.
Data from the FDIC shows that as of December 31, 2022, SVB had total assets of $209.0 billion — while it had total deposits of approximately $175.4 billion. About 89% of the bank’s total deposits are not insured.
The FDIC said, as it “sells Silicon Valley bank assets, future dividends may be paid to uninsured depositors.”
Currently, SVB has 17 branches in California and Massachusetts.
The FDIC said, Silicon Valley Bank’s main office and all branches will reopen on Monday, March 13, 2023. DINB will maintain the normal business hours of Silicon Valley Bank.
Besides this, it said, banking activities including online banking and other services will resume by Monday, March 13.
Official checks at Silicon Valley Bank will keep clearing. Under the Federal Deposit Insurance Act, the FDIC can create a DINB to ensure that customers have access to their insured funds.
In addition, the FDIC directed customers with accounts over $250,000 to contact its toll-free at 1-866-799-0959.
The FDIC said, as a receiver it would retain all assets from the Silicon Valley bank for later disposal. Also, it asked loan customers to continue with their payments as usual.
SVB would be the first FDIC-insured institution to fail this year. The last FDIC-insured institution that failed was Alamena State Bank, Alamena, Kansas, in October 2020.
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