The Silicon Valley Bank (SVB) collapse has created ripples in the banking sector across the world. The 16th largest bank in the United States is known for its relationships with technology startups and venture capital.The SVB's downfall happens to be the largest failure of a financial institution since the collapse of Washington Mutual during the financial crisis more than a decade ago.
The still unfolding crisis in Silicon Valley Bank (SVB) in California has an unlikely victim in India. A relatively small Mumbai-based cooperative bank, which shares some similarity in the brand name (SVC Bank) with that of the failed US bank, is now flooded with enquiries from panicked customers about the safety of their deposits. To dispel all rumours, the bank took to Twitter and issued a clarification. SVC Bank is completely unrelated to Silicon Valley Bank (SVB) that was based in California. We request our members, customers and other stakeholders not to pay attention to baseless rumours and mischief-mongering by unscrupulous elements insinuating similarities in brand names. SVC Bank reserves the right to take due legal action on rumour mongers for tarnishing its brand image”, the 116-year-old bank said in its statement.
The SVC Bank is formerly known as The Shamrao Vithal Co-operative Bank and has a total business of over ₹31,500 crore and a net profit of over ₹146 crore. According to report, the US lender was hit by the downturn in technology stocks over the past year and the Federal Reserve's plan to hike interest rates to curb inflation.The SVB had bought bonds worth billions of dollars over the past couple of years using customers' deposits, AP reported. Although the investments are safe but their value fell because they paid lower interest rates than what a comparable bond would pay.