Considered as Prime Minister Narendra Modi’s pet project, India’s first International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT) crossed the $250 million business transaction mark in six months’ time.
The first mark of $100 million was crossed in early February and in two months’ time, business transactions at IFSC have more than doubled. GIFT situated on the outskirts of Gujarat’s capital Gandhinagar, leading financial institutions — including YES Bank, Federal Bank and ICICI Bank have commenced operations with their IFSC Banking Units (IBUs) there.
State Bank of India is also expected to commence operations soon at GIFT. Punjab National Bank, Corporation Bank, Kotak Mahindra Bank, IDBI Bank and IndusInd Bank are some of the other players who will begin operating at GIFT IFSC in the near future.
The major tax incentives announced in the Union Budget have made the IFSC at GIFT a globally competitive player and many more BFSI players are swarming to this new global financial hub. The IFSC Banking Unit (IBU) at GIFT IFSC is equivalent to a foreign branch and hence facilitates a bank to function as such from within India. IBU offers facilities like buyers’ credit; external commercial borrowing (ECB); accepting deposits and providing credit facilities to wholly owned subsidiaries/joint ventures of Indian companies registered abroad.
“After crossing the $250 million business mark at GIFT IFSC, the next target is $500 million and then the $1 billion mark in coming months. The tax incentives given in the Union Budget have now firmly put GIFT IFSC on the global financial map. After banks, we expect a few insurance companies to start operations soon at GIFT IFSC,” said MD & Group CEO of GIFT City, Ajay Pandey.
According to him stock and commodity market operations are the other major focus areas and work is actively on to get this started at GIFT IFSC. Significant volumes of NSE’s Nifty derivatives trading are taking place on the Singapore Stock Exchange, said Pandey, adding that GIFT IFSC wants to start trading in this segment so that this derivatives trading business can come back to India from Singapore.