Silicon Valley’s customers were largely start-ups and other tech-centric companies that started becoming more needy for cash over the past year as venture capital funding was drying up, companies were not able to get additional rounds of funding for unprofitable businesses, and therefore had to tap their existing funds. So, Silicon Valley customers started withdrawing their deposits. Initially that wasn’t a huge issue, but the withdrawals started requiring the bank to start selling its own assets to meet customer withdrawal requests leading to liquidity crisis. On Thursday 60% of the value was wiped about from SVB and following Friday 69% was wiped out in pre-market trading. Collapse of Silicon Valley Bank, the largest vendor in the start-up ecosystem, is likely to adversely impact the Indian start-up scenario as well as it has brought a lot of uncertainty in the sector overnight. Additionally, Nazara Tech’s two firms hold Rs 64 cr in crisis-hit SVB
Other Highlights of the Week
Centre Releases ₹ 1.40 Lakh Crore Tax Devolution Sum to States
The government has released the 14th instalment of tax devolution of more than ₹ 1.40 lakh crore to states. “The Union Government has released 14th instalment of tax devolution to state governments
amounting to ₹ 1,40,318 crore today, as against normal monthly devolution of ₹ 70,159 crore,” the finance ministry said in a statement on Friday. This is in line with the commitment of the Union government to strengthen the hands of states to accelerate their capital and developmental expenditure, it added.
Centre should regulate manufacturing of drugs instead of state bodies, new bill moots
The Centre has proposed that the country’s apex drug regulatory body, CDSCO to be empowered to regulate the manufacture of drugs or cosmetics, instead of the state drug regulators as is the practice currently, according to the revised draft of a bill that has been sent for inter-ministerial consultations. However, the sale of drugs, cosmetics and medical devices will continue to be regulated by the respective state governments.
Lenders lower rates as home loan growth dips
Banks and home financiers are offering special rates before the financial year-end to lure customers amid sluggish demand, as recent interest rate hikes have made home purchases costly.
