HSBC reassures Indian startup clients with foreign currency accounts after injecting $2.1 billion into SVB

HSBC reassures Indian startup clients with foreign currency accounts after injecting $2.1 billion into SVB

The Reserve Bank of India allows resident individuals to open such accounts in the global financial hub.

FPJ Web DeskUpdated: Wednesday, March 15, 2023, 07:24 PM IST
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The Silicon Valley Bank collapse, the worse for a lender since the 2008 fall of Lehman Brothers, has rattled tech and banking sectors globally. In India, funds of at least 60 lenders are stuck in SVB, since they opened an account with it for securing funds from YCombinator.

But more Indian startups are concerned with accounts at HSBC are concerned about the European lender buying SVB UK for Rs 100, only to pump $2.1 billion into it.

Funds safe and warm closer home?

To reassure clients, HSBC Bank has offered foreign currency accounts to startups in Gujarat's GIFT City, along with the banking sector's support.

The Reserve Bank of India allows resident individuals to open such accounts in the global financial hub, to support subsidiaries and joint ventures abroad.

HSBC's move is meant to reassure clients by allowing them to manage overseas transactions from accounts within India, and move money away from American lenders.

Shouldering HSBC's weight

The decision to rescue Silicon Valley Bank's British arm, has also led to a 6 per cent slump in HSBC stocks, as other European banks are also losing investor confidence.

The SVB contagion has already wreaked havoc on American banks, which managed to rise back for a breather, before taking another dip.

HSBC has bet big on the Indian startup ecosystem, by setting aside $250 million for entrepreneurs last year, as overall funding dried up.

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