Top officials from the Ministry of Finance and Reserve Bank of India (RBI) are set to appear before a parliamentary panel on April 3 to discuss the impact of the global crisis on India. The 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. The panel aims to discuss global financial developments and how they impact India, which is taking strides forward as a significant player in promoting start-ups.
The meeting notice reads that the panel will hear the views of representatives of IVCA on the subject of the “Impact of crisis in certain Global Banks on India's start-up ecosystem”. The notice further elaborates that representatives of the Ministry of Finance (Department of Financial Services), Reserve Bank of India (RBI), and Indian Banks' Association (IBA) will brief the committee on the same topic. Sources said that the Secretary of the Department of Financial Services and the Executive Director of RBI is likely to be present before the panel.
This discussion comes after the collapse of Silicon Valley Bank (SVB), which focused on start-ups. On March 10, 2023, the United States witnessed the second-largest bank failure in its history with SVB, which was set up in 1983. A top US Federal Reserve official blamed US regulators for SVB's rapid collapse after it took the excessive interest-rate risk. The Fed's vice chair for supervision Michael Barr told the House Financial Services Committee that the bank management, supervisors, and regulatory system “failed” during the collapse.
Indian start-ups had deposits worth about $1 billion with SVB. Union Minister of State for Skill Development and Entrepreneurship and Electronics and IT Rajeev Chandrasekhar interacted with over 450 start-ups, owned/co-owned by Indians, Venture Capitalists (VCs), Industry leaders and other stakeholders on the collapse of SVB through video conferencing on March 14, 2023. He assured them that Prime Minister Narendra Modi's government is laser-focused on helping them tide over this crisis.
Apart from Sinha, the Standing Committee of Finance has members cutting across party lines, including 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.
With inputs from ANI