Gujarat Chief Minister Narendra Modi is leaving no stone unturned in selling his pet project Gujarat International Financial Tec-City (GIFT City) at the Vibrant Gujarat Global Summit 2013.
The 800-acre GIFT City is set to have an international financial services centre (IFSC). The IFSC, to be spread over 268 acres, would see financial transactions exclusively in foreign currencies.
“The idea is to create a separate geographically and policy-wise ring-fenced space within GIFT City, which would deal in foreign currencies. The IFSC is being set up under Sections 18 and 55 of the SEZ Act and we are awaiting the due-diligence approval of the ministries of commerce and finance. Moreover, to facilitate transactions within the IFSC, a foreign currencies services board is also being set up,” said S S Thakur, chairman of the foreign currencies services board, GIFT City, and former controller of foreign exchange, Reserve Bank of India.
Thakur said the board would be a single-window foreign exchange transaction facilitator. It would receive applications, process and refer these to the regulatory bodies concerned, such as the central bank and the Securities and Exchange Board of India. It would also approve foreign exchange transactions within the IFSC.
Banking, financial and insurance service companies would also be present in the IFSC. “Banks within the IFSC would also get the first right of refusal against Indian foreign exchange borrowers. For instance, if an Indian company wishes to borrow foreign exchange from abroad, it would have to first approach banks within the IFSC. These banks would raise bulk finance internationally and lend to companies in the IFSC,” said Thakur.
He, however, refused to comment on the time frame by when the board expected an approval from the Centre.