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With Indian startups having funds in the failed Silicon Valley Bank looking to transfer their money, a senior HSBC India official said on Wednesday that the bank is offering them foreign currency account through GIFT city in Gujarat.
"HSBC has announced acquisition of UK arm of Silicon Valley bank. In India, HSBC is a large banker to startups. They were concerned. In India, we have offered them foreign currency account through GIFT city. They were assured with support of larger banking community," Ranjan Bhattacharya, Managing Director, HSBC India, told ANI on the sidelines of CII partnership summit. The US-based Silicon Valley Bank collapsed on Friday. On Monday, the UK arm of failed Silicon Valley Bank was bought by HSBC Holdings plc for just 1 pound (USD 1.21). As of March 10, 2023, SVB UK had loans of around 5.5 billion pound and deposits of around 6.7 billion pound. HSBC UK serves over 14 million customers across the country HSBC will update shareholders on the acquisition at its first quarter 2023 results on May 2, 2023. Bhattacharya said that HSBC already is a very large banker for startups in India. He said around 45 of the top 100 unicorn have bank links with HSBC. "We bank more than 1200 startups. In India we have more than USD 250 million Lending Fund aimed at startups," Bhattacharya said. Customers of banks in Gift City can open foreign currency accounts for international transactions. Bhattacharya said Gift City brings international banking solutions onshore in India, which can be availed by offshore entities. "So we are allowing US dollar, foreign currency accounts to be opened in Gift City. We can open them within 24 hours and these are foreign companies which can open accounts and move foreign deposits overnight seamlessly into these accounts," Bhattacharya said. Bhattacharya said startup community has been quite reassured with the reaction and support of the larger banking community and it is not only HSBC. "I think the entire banking universe has worked together to help the entities which are impacted. So I think generally we see the initial banning have been replaced with a sense of measured decisions that their boards are taking and how they will manage their deposits." Bhattacharya, who is also the Chief of Staff and Head-Strategy and Planning, HSBC India, said he believes India's banking system is safe and sound and will not have any impact of SVB and Singnature Bank. "We have our banking laws which are very sound and robust. The capital ratio, the way depositor money is deployed, whether it is into high quality liquid assets or the statutory liquidity ratios that banks need to maintain in India, ensure very high quality asset liability management," he added. Bhattacharya said that impacted startups have various options whether it is US, UK or in other geographies including Gift City in India. "For Indian startups, Gift city obviously, is a very interesting option and it is quite seamless," he said. (ANI)
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