“Indian banks having branches in GIFT City can open accounts of the holding company based out of the US or anywhere else, and the money can be transferred. Over the last 4-5 days, we have had a phenomenal response from the start-ups as well as some of the private equity/ venture capital firms where they have started opening accounts with us for the same purpose (transferring of their money),” shared Anshul Chandak, Head (Treasury) and Chairperson – Governing Body, GIFT IBU, RBL Bank. A total of 13 domestic banks possess an IFSC Banking Unit in GIFT City.
To restore confidence in the banking system, the US banking regulator, on March 12, guaranteed that all SVB customers would have access to their money.
Multiple Indian start-ups affected by the collapse of Silicon Valley Bank (SVB) have started opening accounts with domestic banks having IFSC Banking Unit (IBU) in GIFT City to transfer their deposits from the US-based lender. The failure of the Santa Clara, California-based lender last week rattled Indian start-ups as many of them have accounts with the lender and have deposited a large sum.
Briefing on the GIFT City banks, Chandak added that the lender had established an online system to make the account opening process easier in its GIFT City branch. “As most of the start-ups are based out of India, having an account in a GIFT City branch will make it easier for them to operate,” he added.
GIFT City is the country’s first International Financial Services Centre (IFSC) established for financial institutions to carry out their overseas businesses operated through branches in other countries. The transactions conducted are permitted only in foreign currency, not rupees.
Some of the major domestic lenders include State Bank of India, Bank of Baroda, Punjab National Bank, Axis Bank, HDFC Bank Ltd, ICICI Bank, RBL Bank and Yes Bank. Earlier this week, Axis Bank said it is actively engaging with these start-ups to help them park their funds in its GIFT City branch.
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