It was all about acronyms and phonetics that linked the failure of a US lender and consequent fright in a Mumbai bank.
Mumbai-based SVC Bank was flooded with enquiries from panicked customers about the safety of their deposits after the news of the collapse of Silicon Valley Bank (SVB) in California broke out in the weekend.
Take this example: One of the customers tweeted asking the SVC bank to confirm the rumours of bank default. The bank replied stating the customer has got the twitter handle wrong. “We are SVC Bank, erstwhile Shamrao Vithal Cooperative Bank, one of the leading & strongest cooperative banks in India with a legacy of 116 years. We have no relation to Silicon Valley Bank,” the bank said.
The bank apparently faced several such enquiries on social media asking about the financial health of the bank.
The SVC Cooperative bank Ltd, a multi-state cooperative bank based in Mumbai and formerly known as The Shamrao Vithal Cooperative Bank Ltd, had to finally issue a statement on March 11 clarifying that it is “completely unrelated” to SVB in California. “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 said in the statement.
Also, the lender will initiate legal actions on rumour mongers for tarnishing its brand image, the bank said.
The Silicon Valley Bank (SVB) was shut down by regulators, and its assets were seized, the Federal Deposit Insurance Corporation (FDIC) in US said on March 10. The closure order was issued by the California Department of Financial Protection and Innovation, which also named the FDIC as the receiver, as per an official statement. The FDIC, which is in-charge of protecting SVB's insured deposits, has formed the Deposit Insurance National Bank of Santa Clara to hold the same. The seizure of SVB's assets marks the largest bank failure since Washington Mutual during the height of the 2008 financial crisis.
SVC Bank was set up in 1906 and has 198 branches and a deposit base of Rs 18,315 crore as on March, 2022. It has total advances of Rs 13,364 crores and operates across 11 states. In July, 2008, the bank had launched its international banking division which handles over Rs 3,000 crores of forex business, according to the statement issued by the bank.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
