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Still, SVB was a problem local to the U.S., according to Srivastava. “If it was a large lender to the corporate sector which would have effected all the companies across the globe, then it would have been a concern for India as well.”
However, according to Srivastava, the risks that magnified and caused the collapse of SVB are getting investors to ponder on how much damage it can do to the balance sheet of the bank. This is because the loss of bond value, rise in credit costs, and demand for more interest on deposits from smaller institutions are some of the resulting factors of the crisis that could change the banking landscape for a while.
This could make the next 12 months a hard time for smaller banks in India, and could work in favour of public sector and bigger banks in India, he said.
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