Depositors will get their money back regardless of insurance: SVB Saga
The Silicon Valley Bank depositors will get their money back even if the amount is not insured, Federal Reserve, FDIC and Department of Treasury said in a joint statement.
Monday March 13, 2023,
2 min Read
After over two frantic days, the Silicon Valley Bank's depositors are finally getting some relief. The fund deposited in the now-defunct bank will be given back to the depositors even the money not insured by Federal Deposit Insurance Corporation (FDIC).
"Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer," a joint statement, release on March 12, by Secretary of the Treasury, Federal Reserve and FDIC said.
This announcement brought some resolution to the otherwise frantic weekend, which began Friday when Silicon Valley Bank (SVB) was seized by regulators for its financial troubles.
SVB collapsed when the bank's customer base consisting of tech founders and investors started withdrawing deposits in hoards. Peter Theil co-founded venture capital firm Founder Fund, had been advising its portfolio firms to withdraw funds from SVB as the investors were concerned about the institution's financial stability.
On Friday, the tech-focused lender collapsed into Federal Deposit Insurance Corp. receivership after customers around the world began withdrawing their deposits. According to Bloomberg, the depositors pulled out $42 billion, one of the biggest bank runs in a single day in over a decade.
The announcement did not specify the date or any indicative timeline on when the depositors will be able to access their funds.
Several Indian startups were also hoping to empty their Silicon Valley Bank (SVB) accounts ahead of any potential crash. But the firms received a body blow after American regulators took over the bank on Friday.
The larger firms are expected to be affected more than the smaller ones as managing runway, with larger teams, among other factors, is challenging.
The founder of a growth-stage fintech company told YourStory on the condition of anonymity that multiple startups in India have an account with SVB. “Multiple Y Combinator startups too bank with SVB,” they said.
Nazara Technologies, a listed gaming and other service entity, informed the stock exchange on Sunday that the company has Rs 64 crore in SVB through its two subsidies-- Kiddopia Inc, subsidiary of Paper Boat Apps, and Mediawrkz Inc run by Datawrkz Business Solution.
Nazara owns 51.5 percent in Paper Boat Apps, while 33 percent in Datawrkz Business Solutions, according to Business Standard.