The Federal Deposit Insurance Corp. (FDIC) is planning to lower deposit requirements for startups that have availed venture debt facilities with Silicon Valley Bridge Bank.
Earlier, the FDIC required customers that availed of venture debt credit lines to have 100% of their deposits with the bank. The bank is now reportedly planning to reduce the requirement by half.
Startups are welcoming the changes as it means that they can use the money that has been freed up for payroll and operational expenses.
- While many of the customers, including startups and VCs, have shown support for the bank, many others are still apprehensive about the bank's stability.
- The move will help alleviate the concerns of the latter group, who will be able to spread their deposits across different banks.
- FDIC's move comes as it continues its search for a buyer for SVB.
