Sitharaman reviews public sector banks amid volatility in US system

Union Finance Minister Nirmala Sitharaman on Saturday chaired a meeting to review the performance of government-owned banks. Various financial, efficiency and health parameters in the banking sector were reviewed.

This review meet comes amid volatility in the US banking system due to the recent collapse of Silicon Valley Bank and some other banks in contagion. For the record, prominent global lender in the world of technology startups, the Silicon Valley Bank collapsed on March 10 after a run on the bank, forcing the US federal government to step in.

Regulators shut down the tech lender and put it under the control of the US Federal Deposit Insurance Corporation (FDIC). Currently, the FDIC is acting as a receiver, which typically means it will liquidate the bank’s assets to pay back its customers, including depositors and creditors.

“Union Finance Minister Smt. @nsitharaman chairs the meeting to review performance of Public Sector Banks #PSBS on various financial, efficiency and health parameters,” Ministry of Finance tweeted.

“The meeting is also being attended by Union Minister of State for Finance Dr @ Drbhagwatkarad, Secretary

@Dfs_india, Chairman @Theofficialsbi and MDS & CEOS of Public Sector Banks.”

Notably, a number of Indian startups have funds parked in the failed Usbased Silicon Valley Bank, and possibly others too.

Earlier, emphasising that the Indian banking system is resilient and strong amid the Silicon Valley Bank-led crisis in the US banking system, Union minister Rajeev Chandrasekhar had said startups should opt for Indian banks as their preferred partners.

Union Minister of State for Electronics and IT Chandrasekhar had said special provisions available at Gift City in Gujarat can be quick and impactful support for Indian startups.

The MOS had also said a transfer of bank deposits worth over USD 200 million was already made into GIFT City, Gujarat, which according to him was a sign of the Indian banking system’s growing prominence.

According to investment experts, this Silicon Valley

Bank collapse followed by Signature Bank closure, will hit bond yield, especially in treasuries badly.

However, this will be restricted to the US bond market only; for Indian treasuries, which are regulated by the Reserve Bank of India, this crisis won’t have much impact, according to most financial experts.