The Silicon Valley Bank in US crashes : Investors worried

California (US) – The leading Silicon Valley Bank in the US has collapsed. The banking regulator of California has sealed the Bank. This has created panic among millions of investors. The property of the bank worth $209 million  (more than Rs 17,134 core) and uninsured deposits worth more than  $174 million have been frozen. This is the largest bank failure in the US since the 2008 financial crisis.

The banking regulator of California closed the bank on 10th March of 2023 and appointed Federal Deposit Insurance Corporation as a receiver to dissolve the Bank. The FDIC has made it clear that the Head office and all the branches of the Bank will reopen on 13th March 2023 and all insured depositors will have full access to their insured deposits. But ‘the limits will be imposed after that’, it is said.

The Silicon Valley Bank was founded in California by Bill Biggerstaff and Robert Medearis in 1983. Currently, Gregory W. Baker is the president of Silicon Valley Bank since 1921. The Bank gave a proposal to sell its shares to reduce the burden of increased interest rates that are reflected in the balance sheet. As a result, its share price went down by 62%.

It will have an effect on India !

The Bank is a prominent investor in Tech and Startup sectors. Silicon Valley Bank has invested in 21 Startup organisations in India. Hence, the collapse of the Bank will have an impact on India as well. The organisations that got funds from the Bank include – Bluestone, CarWale,  InMobi, Paytm, Paytm Mall, One, 97 Communications and Naaptol. But the Bank has not invested much in the Indian market since 2011. Reaction to the Bank’s collapse was seen in a slump in the Indian Share Market.

Elon Musk ready to buy the bank

(Credit : Biz Tak) 

The richest person in the world, the supremo and owner of the organisations like Tesla and Twitter has offered to buy the Silicon Valley Bank.