Banks do over $1 billion business at GIFT City

Special Task Force set up by MoF to address regulatory hurdles for investors at the IFSC

In just around a year since the start of operations, public and private sector banks at India's first and only International Financial Services Center (IFSC) at Gujarat International Finance Tec-City (GIFT City) have clocked in business transactions in excess of $1 billion (roughly Rs 6,700 crore) through their International Banking Units (IBU).

YES Bank has led the pack, doing business over $650 million so far.

On Friday, public sector player The New India Insurance Company Limited logged into the GIFT City as the first insurance company in the IFSC.

"Business transactions at India's first IFSC have already crossed the $1 billion mark and we expect the IFSC business to grow by leaps and bounds now. Apart from banking transactions, GIFT IFSC will host the international business transactions from the insurance segment too. We expect to see a multi-fold jump in GIFT IFSC's business transactions in future due to this development." said Ajay Pandey, managing director and group chief executive officer of GIFT City.

Currently, IBUs of State Bank of India (SBI), ICICI Bank, Yes Bank, Kotak Mahindra, Federal Bank, IndusInd Bank and IDBI Bank are operational at IFSC in GIFT City. As many as 14 banks that are working for Indian companies from Singapore and Dubai are waiting for regulatory approvals to open their respective IBUs at the GIFT City.

Speaking in Gandhinagar on Friday, Arjun Ram Meghwal, MoS for finance and corporate affairs, Government of India said: "More 14 banks are willing to open IBUs at the GIFT City and waiting for approval from regulators. To address such regulatory issues for the banks, insurance companies and other investors, we have already set up a special task force."

According to Meghwal, Reserve Bank of India (RBI) has assured his ministry that it will take a liberal view and act quickly upon such requests.

YES Bank was the first to start operations at the GIFT in October last year. The Bank said it has revised its targets upwards for the current financial year after getting positive response from its international customers during its operations at the IFSC.

Manish Vora, chief executive officer at GIFT-IFSC banking unit of YES Bank said: "Since the beginning of our operations in GIFT City we have already done business of over $650 million, and now we are targeting to do business worth $1 billion by end of March 2017."

Meanwhile, from its unit at the GIFT City the New India Insurance Company will able to provide insurance services to their international and clients as well as Indian companies.

G Srinivasan, chairman and managing director of New India Insurance Company said: "We will now be able to provide global insurance services and facilities to our Indian and international customers from GIFT IFSC. Currently, we provide insurance and re-insurance through our branches in other countries. From GIFT City, we will be able to offer insurance, in dollar denomination or other foreign currencies, to our customers."