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The Silicon Valley Bank collapsed within a period of two days. Here's the sequence of events that led to the largest banking collapse since 2008 

Silicon Valley Bank Collapse: The timeline & how it happened

The Silicon Valley Bank collapsed within a period of two days. Here's the sequence of events that led to the largest banking collapse since 2008&nbsp;

Its perhaps the biggest bank failure since the Global Financial Crisis of 2008. The Silicon Valley Bank (SVB) collapse has sent shockwaves across the globe and has far-reaching ramifications.
So, how did one of the biggest banking collapses in the history of the U.S actually happen?
Silicon Valley Bank amassed huge deposits in 2021. As per the Federal Deposit Insurance Corporation, SVB had over $175 billion in deposits as of December 31st 2022 and over $200 billion in total assets.
SVB invested heavily in bonds which were being issued when interest rates were very low due to the covid pandemic. As per reports, SVB&rsquo;s balance sheet for 2022-end showed $91.3 billion of securities.&nbsp; But, as the world emerged out of the pandemic, inflation reared its head, soaring to 8.2% in October 2022. This was the highest inflation that the U.S had seen in over 4 decades. In response, the Federal Reserve began raising interest rates. Fed Chairman, Jerome Powell, made it very clear, that interest rates had to go up, to clamp down on inflation.&nbsp;
As a result of rising interest rates, the value of SVB's bond holdings, which were issued at lower rates, began falling. At the same time, many startups, who were the bank&rsquo;s customers, began withdrawing deposits to survive, amid a funding crunch. As a result, SVB was forced to sell whatever bonds it could, at a loss. On Wednesday, 8th of March, SVB sold $21 billion worth of bond assets at a loss of $1.8 billion. The bank also announced that it was conducting a capital raise. Despite this announcement, there was a wave of withdrawals from the bank.&nbsp;
Meanwhile, on the 8th of March, crypto-focussed lender &ndash; Silvergate bank said it planned to wind down operations and liquidate because of heavy losses following the collapse of crypto exchange FTX. This caused another wave of fresh withdrawals on Thursday followed by the SVB stock in a downward spiral, crashing over 60%.&nbsp;
As per a regulatory filing, SVB had a negative cash balance of $958 million at the end of business on 9th of March. The filing also said that &ldquo;despite the bank being in sound financial condition prior to March 9th, investors and depositors reacted by withdrawing $42 billion of deposits, causing a run on the bank&rdquo;. This massive withdrawal, led to the bank becoming insolvent and unable to payoff its obligations.
On Friday, March 10th, Federal Deposit Insurance Corporation (FDIC) announced that SVB &ldquo;was closed today by the California Department of Protection and Innovation, which appointed the FDIC as receiver&rdquo;. FDIC also said that all insured depositors would have full access to their deposits until Monday, March 13th. However, the insured deposits have a cap of $250,000. Anyone who has over $250,000 in their accounts are required to call a toll-free number. Going forward, FDIC will oversee the sale of the assets of SVB. The uninsured depositors will be paid dividends from the asset sale.&nbsp;

To strengthen public confidence in the country’s banking system, the Biden administration announced that depositors of the failed Silicon Valley Bank will have access to their money from today

Silicon Valley Bank depositors will have access to their Money from Today

To strengthen public confidence in the country&rsquo;s banking system, the Biden administration announced that depositors of the failed Silicon Valley Bank will have access to their money from today

In a step aimed at protecting the US economy by strengthening public confidence in the country&rsquo;s banking system, the Biden administration has announced that depositors of the failed Silicon Valley Bank will have access to their money from Monday.
&ldquo;The depositors will have access to all their money starting Monday, that is, March 13. No losses associated with the resolution of the Silicon Valley Bank (SVB) will be borne by the taxpayer,&rdquo; said a joint statement by FDIC, Federal Reserve and Department of Treasury.&nbsp; According to the interagency federal statement, shareholders and certain unsecured debt holders, however, will not be protected.
After receiving recommendations from the boards of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, and consulting with the president, Treasury Secretary Janet Yellen on Sunday approved actions enabling the FDIC to complete its resolution of the Santa Clara, California-based Silicon Valley Bank (SVB) in a manner that fully protects all depositors, an official statement said.
California-based Silicon Valley Bank, the 16th largest bank in the United States, was closed on Friday by the California Department of Financial Protection and Innovation which later appointed the FDIC as its receiver.
SVB was deeply entrenched in the tech startup ecosystem and the default bank for many high-flying startups; its abrupt fall marked one of the largest bank failures since the 2008 global financial crisis.
According to the interagency federal statement, shareholders and certain unsecured debt holders, however, will not be protected

The collapse of the Silicon Valley Bank could have repercussions for Indian startups too. Several Indian startups have higher deposits in SVB, than what is insured by the Federal Deposit Insurance Corporation.

Silicon Valley Bank collapse: Impact on Indian startups 

The collapse of the Silicon Valley Bank could have repercussions for Indian startups too. Several Indian startups have higher deposits in SVB, than what is insured by the Federal Deposit Insurance Corporation.

The collapse of Silicon Valley Bank (SVB) has sent shockwaves across the globe. One of the biggest bank failures since the 2008 global financial crisis, the collapse of SVB has far-reaching ramifications. This includes a significant impact on the Indian startup ecosystem.&nbsp;
SVB has been one of the preferred bank of startups and venture capitalists globally. Several Indian startups have exposure to the bank. In fact a large number of Indian startups, especially in the SaaS sector that services U.S clients, have accounts and deposits at the bank. Reports say that Indian startups have over $250,000 parked at SVB, this is more than what is insured by the Federal Deposit Insurance Corporation (FDIC).&nbsp;
"All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023", said FDIC in a statement that also asked customers with accounts that had over $250,000 to contact a toll-free number.&nbsp;
The other fallout of the SVB bank collapse will also impact the fundraising ability of Indian startups as the bank was a key source of funding for tech startups. As per reports, SVB has invested in several Indian firms including InMobi, Carewale, and Bluestone among others. For these companies, their raised funds could get stuck and lead to a cash crunch.
Also watch: <a href="https://www.editorji.com/business-news/markets/silicon-valley-bank-shut-down-a-look-at-biggest-banking-failures-since-2008-1678526214050">Silicon Valley Bank collapse: a look at biggest banking failures since 2008</a> A combination of all these factors will further exacerbate the rough weather and a funding crunch that Indian startups were already facing. In fact, in the last few months, Indian startups have already been cutting costs and announcing layoffs, a situation that may only worsen going forward.&nbsp;&nbsp;
As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits.&nbsp;
&nbsp;

Silicon Valley Bank seized by US regulator as depositors pull cash

The bank failed after depositors &mdash; mostly technology workers and venture capital-backed companies &mdash; began withdrawing their money creating a run on the bank.
&nbsp;
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The Federal Deposit Insurance Corporation seized the assets of Silicon Valley Bank on Friday, marking the largest bank failure since Washington Mutual during the height of the 2008 financial crisis.
The bank failed after depositors &mdash; mostly technology workers and venture capital-backed companies &mdash; began withdrawing their money creating a run on the bank.
Silicon Valley was heavily exposed to tech industry and there is little chance of contagion in the banking sector as there was in the months leading up to the Great Recession more than a decade ago. Major banks have sufficient capital to avoid a similar situation.
The FDIC ordered the closure of Silicon Valley Bank and immediately took position of all deposits at the bank Friday. The bank had USD 209 billion in assets and USD 175.4 billion in deposits as the time of failure, the FDIC said in a statement. It was unclear how much of deposits was above the USD 250,000 insurance limit at the moment.
Notably, the FDIC did not announce a buyer of Silicon Valley's assets, which is typically when there's an orderly wind down of a bank. The FDIC also seized the bank's assets in the middle of the business day, a sign of how dire the situation had become.
Also Watch: <a href="https://www.editorji.com/business-news/cryptocurrency/crypto-meltdown-over-70-billion-wiped-off-crypto-market-in-24-hours-1678454540855">Crypto meltdown: Over $70 billion wiped off crypto market in 24 hours</a>

The Department of Telecom has proposed to impose a Rs 10,000 penalty for every call and SMS made by telemarketers after 50 violations, according to an official source.
The Department of Telecom (DoT) has proposed to make the norms more stringent by reducing the slabs for levying penalty to Rs 1,000 per violation for 0-10 breaches, Rs 5,000 each for 10-50 violations and Rs 10,000 each for more than 50 violations.
Besides, the DoT's Digital Intelligence Unit (DIU) will check violations at the device-level as well

Rs 10,000 fine for pesky SMS and callers says DoT 

End to pesky calls and SMS? Department of Telecom&nbsp;proposes a Rs 10,000 fine for repeat telemarketing offenders/&nbsp;

End to pesky calls and SMS? 

<h2 class="alternativeHeadline">DoT has proposed to further tighten the noose on pesky callers by imposing a Rs 10,000 penalty for every call and SMS made by telemarketers after 50 violations.&nbsp;</h2>

The Department of Telecom has proposed to impose a Rs 10,000 penalty for every call and SMS made by telemarketers after 50 violations, according to an official source.
The Department of Telecom (DoT) has proposed to make the norms more stringent by reducing the slabs for levying penalty to Rs 1,000 per violation for 0-10 breaches, Rs 5,000 each for 10-50 violations and Rs 10,000 each for more than 50 violations.
Besides, the DoT's Digital Intelligence Unit (DIU) will check violations at the device-level as well

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