96 terrifying hours: Silicon Valley Bank account holders recall their anxiety from March 9-12

Ritu Jha-

Between March 9 and March 10 this year, a massive bank run ensured that Bay Area banking giant Silicon Valley Bank collapsed, triggering a massive panic in the American financial system.

For a harrowing 96 hours, depositors felt they were left in the lurch – affected first by rising interest rates and then the inability to withdraw their money.

On March 12, however, depositors were thrown a lifeline in the form of a joint statement issued by Secretary of the Treasury Janet Yellen, Federal Reserve Chairman Jerome Powell, and FDIC Chairman Martin Gruenberg, stating that all depositors at SVB would be fully protected and would have access to both insured and uninsured deposits starting the following Monday, March 13.

ALSO READ: Silicon Valley Bank (SVB) shut down shakes the Tech world in the Silicon Valley

The FDIC then established a bridge bank successor, Silicon Valley Bridge Bank, and later on March 27, First Citizens Bank & Trust Company, a subsidiary of First Citizens BancShares, assumed all customer deposits and acquired all loans of Silicon Valley Bridge Bank from the FDIC and began operating all SVB branches.

indica caught up with a few account holders who went through the “terrifying experience” of looking on helplessly as their dreams and aspirations threatened to evaporate along with their capital as SVB downed shutters.


Girish Muckai, founder and CEO, Rockfish Data

Girsh Muckai, founder of Rockfish Data, a startup that offers a Generative AI-based solution to tackle DataOps bottlenecks, recounted: “On March 9, we learned that SVB was in dire straits. I was apprehensive and tense. Between then and Monday, March 13, I went through a lot of misgivings. But, on Monday, thanks to The US Federal Deposit Insurance Corporation (FDIC) everything cleared up and life returned to normal.”

In those four harrowing days, Muckai worried about his company’s future. “Rockfish Data started in the last quarter of 2022, so it is quite new. Such a sudden development in a bank that we had put all our resources and trust in, was unexpected.”

Muckai has not severed all connections with SVB, though. “We have not closed our SVB account. Since March 13, everything is available, everything is working like a charm. SVB has served the community well. There is no reason not to bank with them. We want liquidity, we want to make sure we have options. We’ll dissect what happened with SVB, but it is also true that people reacted too quickly and took their money out. That was one reason the bank fell apart on on March 9.”

He feels the bank should have acted and communicated in a different way. “Officials should have informed us. That would have saved us from the trauma and pain. After SVB collapsed, there were a lot of conflicting messages. It increased our confusion, there was so much uncertainty, from a customer point of view. This was all too sudden.”

Why choose SVB at all then? “SVB served the startup community, and it had a good reputation. I knew the other companies banking with SVB. It was reassuring, and the account holders were happy with SVB’s services. The bank tailored its offerings for the Silicon Valley startup ecosystem. Cloud credits, for example. They didn’t charge for wire transfers.”

But all those pluses came to naught on March 9. He recounted: “Our first response as a company was to open an account in another bank. We worried about our team. Being in this situation is worse than losing your own money. It’s investors’ money. It is money that you need to spend on the company and people. My only thought was, ‘What do I do now?’”

There were many others in the same boat, he says. “At least we knew we were not alone. Many others, with much money at stake, were impacted. On Sunday morning, I got calls from other entrepreneurs who said none of the politicians or government officials were doing much, and that we should call for their intervention.”
There are lessons Muckai learned from this episode. “I figured we are not alone in this. There is a support system, and that is reassuring. That ecosystem worked like a charm. The entire community affected by the SVB’s collapse was calling, texting, talking, and acting on things together in a unified voice. It was phenomenal. It brought people closer. It made us realize what is important for us and how we can work together to make it happen.”

Muthu Krishnan, chairman and CEO, Kencor Health

Muthu Krishnan, chairman and CEO of Palo Alto-based Kencor Health too, felt that the rug was being pulled from beneath his feet. As SVB was breathing its last between March 9 and 10, his capital was locked, leaving him anxious about his company’s future.

Kencor uses innovative technology to assist patient navigation, which has a direct impact on patient experience. This allows all medical professionals to have more time for patient care and makes their process more productive through the Kencor Health Ecosystem.

“Kencor Health was founded in 2017 with my partner, and we banked with SVB, which was referred to us by venture capitalists. They told us SVB was entrepreneur-friendly, and supported our transactions. It was technology driven and approachable. Even though we didn’t opt for any funds from SVB, it was looking to extend help,” Krishnan said.

“We had no issues until March 9,” he said. “We had been doing well with all the investments, and we had the payroll and the software development in India. Our team is in India and we wired them the money. On March 9, everything turned upside down. For a founder and CEO, this is the worst that could happen. I received innumerable calls from VCs, partners and well-wishers. Social media exploded and everybody was asking us to withdraw all our money from SVB and move out,” he added.

Krishnan said he did not know what or whom to believe. “I didn’t do anything that day, but early on Friday (March 10) morning, my phone started ringing again. Everybody gave the same advice and I couldn’t sleep after that. As I waited for the bank to open, I opened a new bank account and got ready to transfer my funds out of SVB. But my accountant said everything was closed, and nothing can be done.”

Moreover, rumors began about depositors being able to withdraw only up to $250,000 and that too, on March 13. When we started wiring the money, SVB’s website crashed.”

Over the weekend (March 11 and 12), Krishnan said, “I was going crazy. The only thing left was to call some investors and my friends. They all offered to help and comforted me. My friends, family members, and investors were soothing me. But from Friday till Sunday, I couldn’t sleep. I was constantly on the phone and internet to keep abreast of the developments. My investors from India also had been calling me, one of them who has offered to invest in Kencor Health, said that he will back me up and that I shouldn’t worry. Such assurances meant a lot since then I was locked out of my bank account and didn’t have anything access to anything, not even my credit card. But my family was extremely supportive and helped me tremendously.”

Like most startup owners and SVB account holders, Krishnan waited for Monday when the bank was scheduled to reopen. Working according to a plan, he reached the bank with his accountant early in the morning.

“We tried to talk to the bank officials and they said, two account holders will be allowed to go inside at a time. When our turn came, we went and the rest was smooth. They did a fantastic job and we withdrew the money and put in my new account at Chase. It is such a relief. I called my family, friends, and investors and told them that everything has been sorted out after days of panic.”

He asserted how the money he had put in SVB was his own, not taken on credit. “For anybody in my shoes, it would not be an easy journey. I don’t want anybody to go through the nightmare. But I am glad that it had a happy ending.”
He said he has decided never to put his money in one bank account. “SVB officials were aware of what was going to happen and their mistake was they did not inform us. The SVB management should have informed everybody. The FDIC did a fantastic job, very professionally done.”

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