Govt, RBI must 'ring-fence' Indian banking system: Anand Sharma on Silicon Valley Bank collapse

RBI and the government need to reassure and ring-fence the Indian banking system and protect startup entrepreneurs and saving account holders, the senior Congress leader said.

Senior Congress leader and former commerce and industry minister Anand Sharma on Wednesday expressed concern over the Silicon Valley Bank collapse and urged the RBI as well as the government to ''ring-fence'' the Indian banking system and protect startup entrepreneurs.

California-based Silicon Valley Bank (SVB), the 16th largest bank in the United States, was closed on Friday by the California Department of Financial Protection and Innovation which later appointed the Federal Deposit Insurance Corporation (FDIC) as its receiver.

In a series of tweets, Sharma said that for G20 leaders, this is not the time to watch and wait, but to act. The collapse of the Silicon Valley Bank and the ripple effect enveloping the Euro continental region, is a grim reminder of the 2008 economic crisis, he said. World leaders need to act before this becomes a domino, stressed Sharma, who was the minister of commerce and industry from May 2009-May 2014.

''Recovering still from the disruption of COVID-19, the global economy is still vulnerable, confronted with high inflation, rising youth unemployment and falling investments and industrial production,'' he pointed out.

''US is protecting even the uninsured account holders where the Indian start ups and entrepreneurs have high exposure to SVP and shaky global banks,'' Sharma said.

He said it is the need of the hour that India should take the lead and call an emergency meeting of G20 finance ministers and Central Bank Governors. ''RBI and the government need to reassure and ring-fence the Indian banking system and protect startup entrepreneurs and saving account holders,'' the senior Congress leader said.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)