Silicon Valley Bank fallout drags in a bank with a similar name after ‘baseless rumors and mischief-mongering’
The collapse of Silicon Valley Bank caused panic across the U.S. and Britain last week—but as regulators in both countries scrambled to salvage depositors’ funds, a much smaller bank on another continent found itself inadvertently entangled in the crisis.
Little-known Indian lender SVC, which has 198 branches across India, put out a statement on Saturday to clear up the confusion between itself and Silicon Valley Bank, which is often abbreviated to SVB.
“SVC Bank is completely unrelated to Silicon Valley Bank (SVB),” SVC said. “We request our members, customers, and other stakeholders not to pay attention to baseless rumors and mischief-mongering by unscrupulous elements insinuating similarities in brand names.”
The bank went on to threaten legal action against any “rumor mongers” who set out to “tarnish its brand image.”
SVC also sent clarifications to its customers in Mumbai over the weekend via text messages written in English and the locally spoken Marathi language, news agency Reuters reported.
California-based Silicon Valley Bank—a key lender in the VC-backed startup space—imploded last week after failing to raise funds to plug a near $2 billion hole in its finances, marking the biggest collapse of a U.S. bank since the 2008 financial crisis.
On Monday morning, it emerged that banking giant HSBC had bought SVB’s U.K. arm for just £1 ($1.21), rescuing many British tech companies that had feared collapse if a rescue deal had not been made.
However, its U.S. parent company failed to find a buyer.
On Sunday, the Federal Deposit Insurance Corporation (FDIC), Federal Reserve, and Treasury Department announced that all SVB depositors—as well as depositors at Signature Bank, which also collapsed over the weekend—would be protected without any losses to taxpayers, thanks to the invoking of a “systemic risk exception.”
The 116-year-old SVC Bank, meanwhile, reassured investors and customers on Saturday that—unlike SVB—it had “proven, robust, and strong fundamentals.”
The Mumbai-headquartered lender was founded in 1906, and was formerly known as the Shamrao Vithal Co-op Bank.
One SVC branch manager told Reuters the company’s corporate heads had decided to take action as rumors about the bank’s financial health took off on social media.
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