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The collapse of the US-based Silicon Valley Bank (SVB) will create a gap in the startup ecosystem and the budding entrepreneurs will have to find ways to ‘survive the winter’, Singapore Monetary Authority Chief Fintech Officer Sopnendu Mohanty said on Monday.

Mohanty is in New Delhi to attend the India-Singapore Hackathon 2023.

He said that accessing capital will be the single biggest challenge by the fintech startups in the near term.

Silicon Valley Bank’s abrupt collapse–that unfolded in a matter of hours earlier last week–has left Silicon Valley entrepreneurs unnerved and jittery. Federal Deposit Insurance Corporation on Friday seized the assets of Silicon Valley Bank–the action reportedly in the middle of the business day highlighted the severity of the situation.

The bank was deeply entrenched in the tech startup scene and the default bank for many high-flying startups. Its abrupt fall marks one of the largest bank failures since the 2008 global financial crisis.

According to reports, regulators have closed New York-based Signature Bank on Sunday, making it the third largest failure in US banking history.

“The impact of this will be startups. Startups have used this bank (SVB) to borrow money and with this bank going down…will create a gap in the startup ecosystem,” Mohanty said.

When asked the big challenges for fintech companies in the near term, he said accessing capital will be the single biggest challenge for them.

“It will not be easy. Existing founders will struggle even getting the existing capital,” he said, adding the other challenges include complex regulatory standards and “very” tough market conditions.

“So they have to deal with this market crisis from profitability perspective. So the startups will have to scale back, spend less. Do not burn the money irresponsibly. They have to preserve capital and find a way to survive the winter,” he added.

Talking about the integration of Unified Payments Interface (UPI) of India and PayNow of Singapore, Mohanty said this is going to be the global template for multi-country connectivity.

“I think this will become a foundational infrastructure upgrade for the future of financial services,” he added.

He said that the trend looks “quite” positive as a lot of people will use this mechanism.

Meanwhile, speakers participating in a session of the Hackathon talked about the impact of the collapse of the US banks on the entrepreneurs and advised them to use funds carefully.

Speaking at the inaugural session, Union minister Dharmendra Pradhan said India is a major power in the digital world.

The minister for education and skill development and entrepreneurship said that the government is working with Singapore on increasing cooperation in areas such as education and skill development.