SVB fully exited Paytm by selling stake to private investors, clarifies Vijay Shekhar Sharma

Silicon Valley Bank, whose operations have been abruptly closed as a consequence of monetary irregularities, has totally exited One 97 Communications and has no investments as of date, chief of the fintech main Vijay Shekhar Sharma clarified on twitter.

“Long back by selling to other private investors, SVB exited fully with handsome returns on their total investment of only $1.7 million,” Sharma tweeted.

Sharma’s clarification comes following a news report that mentioned SVB had made investments to the tune of $7.42 billion in One 97 Communications and its fintech platform Paytm.

Sharma mentioned Silicon Valley Bank was one of many early buyers in Paytm mother or father.

SVB, a part of the SVB Financial Group, largely focuses on lending to expertise firms, offering a number of companies to enterprise capital, and personal fairness companies that put money into expertise and biotechnology. Besides, it additionally presents non-public banking companies to high-net-worth people.

The financial institution had introduced a $1.75 billion share sale to plug a $1.8 billion loss that it incurred from promoting a $21 billion bond portfolio consisting principally of US Treasuries. This raised eyebrows and triggered questions in regards to the financial institution’s potential to run the business.

The collapse of Silicon Valley’s largest business financial institution is considered to be the largest financial institution failure because the 2008 monetary disaster. Gauging the contagion it might trigger to all the system, California banking regulators moved shortly to close it down. Share value of the financial institution crashed greater than 60% for 2 consecutive days and eroded vital wealth of buyers.

About 89% of the financial institution’s $175 billion in deposits have been uninsured as of 2022, Reuters reported.

The FDIC is racing to seek out one other financial institution over the weekend that’s prepared to merge with Silicon Valley Bank, in keeping with studies.

While this can be a huge gap within the system, notably at a time when charges are rising and the financial system is slowing down, specialists don’t see it having any influence on the Indian banking system.

(Disclaimer: Recommendations, ideas, views and opinions given by the specialists are their very own. These don’t symbolize the views of The Economic Times)

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