Indian startups had deposited about $1 billion (more than Rs 8,200 crore) in the US-based Silicon Valley Bank which failed last week, Union Minister Rajeev Chandrasekhar said on Thursday, urging domestic banks to lend more, reported Reuters.

The Silicon Valley Bank was shut down by the California Department of Financial Protection and Innovation in the United States on March 10 – making it the largest lender to fail since the 2008 global economic crisis.

The California state banking regulator took control of the bank two days after it announced a loss of nearly $1.8 billion (over Rs 14,500 crore) from a sale of investments on March 8. The announcement created panic among customers of the bank, triggering a withdrawal of $42 billion (over Rs 3.4 lakh crore) in deposits, the California Department of Financial Protection and Innovation said in its order.

In a Twitter spaces interaction on Thursday, Chandrasekhar said that the matter at hand was how Indian startups could be made to transition to the domestic banking system rather than depending on “the complex cross border US banking system with all of its uncertainties in the coming month”.

The Union minister of state for electronics and information technology made the statement after he met over 460 stakeholders, including startups that had deposited their money in the US lender, this week.

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US lenders rescue bid for First Republic Bank

Amid fears that a financial meltdown similar to that of 2008 might be round the corner, 11 of the biggest banks in the US on Thursday announced a $30 billion (about Rs 2.47 lakh crore) rescue package for First Republic Bank in an effort to prevent it from becoming the third to fail in less than a week, reported the Associated Press.

Three days after the Silicon Valley Bank collapsed, New York-based Signature Bank that had assets more than $110 dollars (over Rs 9 lakh crore), also failed. As of March 8, Signature Bank, which was a big lender to crypto businesses, had deposits totaling $89.17 billion (over Rs 7 lakh crore).

San Francisco-based First Republic serves a similar clientele as Silicon Valley Bank.

First Republic Bank’s shares had fallen to a low of 36% on Thursday but rallied after reports the rescue package emerged. However, the rout continued in the extended trading hours with the lender’s shares falling to 17%, reported Reuters.

In the rescue package, Citigroup, JPMorgan Chase, Bank of America and Wells Fargo have agreed to each put $5 billion (over Rs 41,226 crore) into First Republic. Morgan Stanley and Goldman Sachs will deposit $2.5 billion (about Rs 20,613 crore)each. The remaining $5 billion would consist of $1 billion contributions from BNY Mellon, State Street, PNC Bank, Truist and US Bank.

“We are deploying our financial strength and liquidity into the larger system, where it is needed the most,” the banks said in a statement.