Silicon Valley Bank’s Asian Customers Struggle to Recover Deposits and Repay Loans: What’s the Solution?


Silicon Valley Bank’s Asian customers are facing significant challenges as the FDIC seized their deposits and they are still obligated to repay their loans to First Citizens Bank. This article explores the difficulties these customers are encountering and potential solutions to their predicament.

1. Deposits Seized, Loans Unpaid: The Dilemma

Asian customers who held accounts at Silicon Valley Bank’s Cayman Islands branch had their deposits transferred to the FDIC’s account, leaving them with zero balances. However, they are still responsible for repaying outstanding loans to First Citizens Bank. This situation puts them in a difficult position, as they cannot access their deposits while having to meet loan repayment obligations.

2. Using Deposits to Offset Loans: Legal Constraints

Some customers have inquired with First Citizens Bank about using their deposits in the Cayman Islands branch to offset their loans. Unfortunately, a First Citizens spokesman clarified that current circumstances do not legally permit offsetting the deposits. First Citizens now owns the loans, and the Cayman Islands deposits are held in Silicon Valley Bank’s former holding company, Silicon Valley Bank Financial Group. This legal constraint adds further complexity to the situation.

3. FDIC’s Role and Potential Resolution

Although the FDIC retains the authority to transfer loans related to Silicon Valley Bank’s Cayman Islands accounts back to the receivership, a resolution remains elusive for these Asian customers. The FDIC has informed depositors that they will be treated as general unsecured creditors, allowing them until July 10 to file claims. The receiver has up to 180 days to decide on the validity of these claims. The FDIC’s discretion in addressing this issue highlights the need for a policy decision to alleviate the customers’ plight.

4. Squeezed in Both Directions: Customers’ Predicament

Customers who lost their deposits but still must repay their loans find themselves in a challenging position. They face pressure to repay short-term loans, while the funds earmarked for loan repayment remain locked in the Cayman Islands branch’s account. This squeeze has financial implications and adds to the complexity of the situation.

5. Exploring Potential Solutions

While a definitive solution is not yet available, there are a few potential avenues that may offer some relief to Silicon Valley Bank’s Asian customers:

  • Negotiating Loan Repayment Terms: Customers could engage in discussions with First Citizens Bank to negotiate extended repayment periods or alternative arrangements. This may provide temporary relief and flexibility.
  • Engaging Legal Counsel: Seeking legal counsel familiar with cross-border banking regulations and recovery procedures could help customers understand their rights and explore legal avenues to protect their interests.
  • Advocating for Policy Changes: Customers can voice their concerns to relevant regulatory authorities and policymakers, urging them to consider policy changes that provide a more equitable resolution for depositors in similar situations.


Silicon Valley Bank’s Asian customers continue to face significant challenges as they grapple with frozen deposits and outstanding loan repayments. While the situation is complex, exploring potential solutions such as negotiating loan repayment terms, engaging legal counsel, and advocating for policy changes may provide some relief. As the process unfolds, customers need to stay informed, seek professional advice, and actively participate in discussions to protect their interests.

Disclaimer: This article provides general information and does not constitute financial or legal advice. Customers should consult professionals and experts for personalized guidance regarding their circumstances.