GANDHINAGAR : Integrated Regulator for International Financial Services Centers Authority, Gujarat Gift City, is set to complement the efforts of local regulators to bring back the flow of foreign capital into India. The regulator’s efforts will give Indian companies better access to global capital with nearly two dozen banks, including HSBC and Standard Chartered, providing services in fundraising, financial market transactions and retail dollar deposits, a top official said
And the consolidated balance sheet size has more than doubled to $35 billion in the past two years since the unified regulator assumed formal status. Prime Minister Shri Narendra Modi is likely to visit GIFT City this Friday after a gap of five years and launch many new initiatives.
“Being a unified regulator in a specially created international financial sector, IFSCA “Besides taking international financial services onshore, it essentially complements and complements domestic financial regulators in attracting foreign capital,” IFSCA Chairperson Srinivas Injeti told. “There is absolutely no regulatory arbitrage between us. This is a misconception.” There are around 900 funds operating in India under the purview of the Securities Exchange Board of India.
They receive foreign capital from their offshore feeder funds, which are operating from international hubs such as Hong Kong, Singapore or London. “We are creating a pull factor for these existing offshore funds to reposition GIFT and make it the preferred destination for new funds,” the chairperson said. Some of those potential funds could include PIMCO, Blockrock, WestBridge, Ontario Teachers, CPPIB and some Middle East-based funds, market sources said.
Individual banks and investors could not be immediately reached for comments. Standard Chartered Bank has approved loans as low as Rs 50 lakh (approximately $62,620) to an entity under the external commercial lending route with this facility. “MSMEs are getting wider access to credit, which was otherwise not traditionally possible,” Srinivas said without disclosing details. A market source said HSBC has created a book worth $3 billion in just one-and-a-half years, which is believed to be one-fifth of the size of India’s balance sheet.
More than half the consolidated balance sheet size of banks was achieved between April 2015 and March 2020, prompting a spurt in business activity in Gujarat GIFT City, for which North Block marked IFSCA as a regulator two years ago was. Cumulative over the counter derivatives transactions, including non-deliverable forwards, have more than doubled in a year to cross $313 billion.
about two years ago, Reserve Bank of India allowed local banks to trade in the NDF market through GIFT City, essentially opening the door for central bank intervention in that market, which had caused sleepless nights to Mint Road in 2013 amid wild swings. Would do it “For us, this is the Hong Kong of India,” said Srinivas, who went to the London roadshow a few weeks ago.
“This time the experience was different because we had evidence to demonstrate,” he said. Major reforms include aircraft leasing rules, tax exemption and 10-year tax exemption from business profits