The digital lender said on March 13 that it intended to investigate strategic alternatives for its businesses, including the holding company, SVB Capital, and SVB Securities. The lender now intends to file for bankruptcy protection. Several startups in India have been impacted by the failure of Silicon Valley Bank, a significant lender to American entrepreneurs since the 1980s.

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Days after its former subsidiary Silicon Valley Bank was taken over by US regulators, SVB Financial Group announced on Friday that it had filed for a court-supervised reorganization under Chapter 11 bankruptcy protection to seek asset purchasers. The sale of Silicon Valley Bank’s (SVB) assets by the Federal Deposit Insurance Corporation will take place separately from the bankruptcy process (FDIC). The American financial system is kept stable, and the public is still confident in it thanks to this independent body.

The decision to file for bankruptcy protection follows the company’s announcement on March 13 that it intended to investigate strategic alternatives for its companies. In premarket trading, shares of major US banks dropped by more than 1.5%. Regional institutions saw losses of 10% to 20%, including PacWest Bancorp and First Republic Bank. The Chapter 11 filing excludes the funds and general partner companies of SVB Securities and SVB Capital. The business declared that it intended to move through with the procedure to assess alternatives for the operations and its other assets and investments.

The parent company was considering declaring bankruptcy protection in order to sell assets, according to Reuters. Silicon Valley Bank was shut down by Californian regulators last Friday, making it the most major fall since Washington Mutual failed during the 2008 financial crisis. The meltdown decimated bank stocks and caused investors to fear a global market contagion.

A rise in yields forced the online lender to sell a portfolio of Treasury notes and MBS to Goldman Sachs at a $1.8 billion loss. It intended to raise $2.25 billion in ordinary equity and preferred convertible stock in order to close that gap. Nonetheless, worried clients took their money out of the bank, resulting in $42 billion in withdrawals in a single day.

On Friday, the company reported having about $2.2 billion in liquid assets. Its asset value at the end of the previous year was $209 billion. The decision to start bankruptcy procedures was made as a result of the failure of immediate steps to boost confidence to allay concerns about financial contagion. After Silicon Valley Bank and Signature Bank (SBNY.O) collapsed this week, the value of financial equities has fallen by several billions of dollars, and credit stress has gotten worse for Wall Street’s top banks.

According to Art Hogan, who is the chief market strategist at B. Riley Investment Management, there is a lot of bad press about SVB that is harming its reputation to the point that it is hard to estimate how much they stand to lose.

According to Union Minister Rajeev Chandrashekhar, more than a billion dollars of money from hundreds of Indian entrepreneurs were invested in SVB. Mr. Chandrashekhar claimed to have met more than 460 stakeholders this week, including startups impacted by SVB’s closure. He claimed to have forwarded their recommendations to Nirmala Sitharaman, the minister of finance. Mr. Chandrashekhar cited one of the ideas he had forwarded to the Finance minister: Indian banks might provide companies with money in SVB, a deposit-backed credit line using those as security.

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