India News | Finance Ministry, RBI Officials to Depose Before Parliamentary Panel on Impact of Global Crisis on India's Startup Ecosystem

By Payal Mehta

New Delhi [India], April 3 (ANI): Ministry of Finance and Reserve Bank of India top officials to depose before a parliamentary panel on April 3 to discuss the global crisis and its impact on India.

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"Hearing of views of representatives of Indian Private Equity and Venture Capital Association (IVCA) on the subject 'Impact of crisis in certain Global Banks on India's startup ecosystem'," the notice for the meeting reads.

"Briefing by representatives of Ministry of Finance (Department of Financial Services), Reserve Bank of India (RBI) and Indian Banks' Association (IBA) on the subject 'Impact of crisis in certain Global Banks on India's startup ecosystem," the notice further elaborates.

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This Standing Committee for Finance chaired by Bharatiya Janata Party (BJP) MP Jayant Sinha has also called representatives of 'The Indian Private Equity and Venture Capital Association (IVCA)' to discuss the matter on Monday.

"Secretary, Department of Financial Services, and Executive Director, RBI are likely to be present before the panel," sources told ANI.

They said that the panel is to discuss global financial developments and how it impacts a country like India which is taking huge strides forward as a big player in promoting Startups.

This discussion comes at the back of the collapse of the start of focused lender SVB Financial Group.

A top US Federal Reserve official on Wednesday blamed US regulators for Silicon Valley Bank's rapid collapse earlier this month after it took an excessive interest-rate risk.

"I think that anytime you have a bank failure like this, bank management clearly failed, supervisors failed and our regulatory system failed," the Fed's vice chair for supervision Michael Barr told the House Financial Services Committee.

He said the Silicon Valley Bank (SVB) management, supervisors, and regulatory system 'failed' during the collapse.

On March 10, 2023, the United States (US) witnessed the second-largest bank failure in its history with Silicon Valley Bank which was set up in 1983.

Union Minister of State for Skill Development and Entrepreneurship and Electronics and IT Rajeev Chandrasekhar interacted with over 450 startups, owned/co-owned by Indians, Venture Capitalists (VCs), Industry leaders and other stakeholders on the collapse of Silicon Valley Bank through video conferencing on 14 March 2023.

He had assured them that the Narendra Modi government is laser-focused on helping them tide over this crisis.

Indian startups had deposits worth about USD 1 billion with embattled Silicon Valley Bank, Rajeev had said.

Chandrasekhar had said the Indian banking system was robust and suggested that they could explore using it, "Indian banking system is most stable and robust and you must explore it as part of your organisational framework. While startups have a natural incentive to use banks like SVB, we must figure out a way to use the Indian banking system without changing your business model," Rajeev had said during an interaction.

This consultation was part of the government's approach to address the situation and offer any assistance to members of India's innovation and startup ecosystem who had financial holdings in SVB.

Apart from the former MoS Finance, Jayant Sinha, this Standing Committee of Finance has members cutting across party lines. Former Finance Minister P Chidambaram, former Union Minister Manish Tewari, former Law Minister Ravi Shankar Prasad, senior TMC MP Professor Sougata Roy, AAP, Rajya Sabha MP Raghav, Chadha, and BJD MP Amar Patnaik are among the list of members on this committee. (ANI)

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