Tag: IFSC

GIFT City regulator eases reinsurance biz norms to lure foreign, Indian companies, BFSI News, ET BFSI

Personal Finance

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GIFT City

The International Financial Services Centre Authority (IFSCA), the regulator for Gujarat-based International Financial Services Centre (IFSC), has announced a new liberal regulatory regime for facilitating the formation of various international and Indian insurance businesses in the Gujarat International Finance Tec-City (GIFT City).

Global reinsurers can procure business from regions around India, by setting up operations at GIFT City.

No foreign reinsurer has set up operations at the centre till now, despite zero tax provision.

Eased rules

Under new regulations, foreign insurers and reinsurers can set up branch offices or subsidiaries as IFSC Insurance Offices (IIOs) to undertake insurance or reinsurance business from IFSC. Indian insurance and reinsurance companies, including foreign reinsurance branches (FRBs), registered with Insurance Regulatory and Development Authority of India, can also set up branch offices to undertake insurance or reinsurance business from IFSC.

In the case of a branch, a company does not need to bring in any capital, and in the case of subsidiaries, the companies will require a paid-up capital, as per Insurance Act, 1938, of Rs 100 crore for insurance and Rs 200 crore for reinsurance.

Onshore capital

No onshore assigned capital will be required for foreign insurers or foreign reinsurers setting up IIOs as branches. The assigned capital of $1.5 million can be maintained in home jurisdictions. Further, there’s no onshore solvency requirement for IIO in the IFSC. The assigned capital solvency margin will have to be maintained in the home jurisdiction.

The new regulations allow managing general agents under a binding agreement.

IFSCA efforts

The IFSCA has been making structured efforts to boost global investments in GIFT City, and to make IFSC a global financial hub at par with other IFSCs in the world. To boost the establishment of IFSC alternate investment funds, the IFSCA released a circular providing benefits with respect to leveraging activities, co-investment opportunities and relaxation of diversification norms. The desire of the IFSCA to form regulations that are intended to quickly bring the funds set up in IFSC at par with offshore funds is an important consideration for both foreign and Indian companies, while deciding on the jurisdiction of the fund.



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Deutsche Bank gets nod to set up IFSC banking unit at GIFT City, BFSI News, ET BFSI

Banking & Finance

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Deutsche Bank will set up its IFSC banking unit at India’s first global financial centre in Gujarat. The bank has received approval from the GIFT SEZ Authority to set up an IFSC banking unit at India’s first International Financial Services Centre (IFSC) at GIFT City, Gujarat, a release said on Thursday.

The leading German bank with strong European roots has a global network across 59 countries.

This will serve as a primer for renowned banks from other geographies to consider GIFT City a viable destination for international financial services, said Tapan Ray, MD & Group CEO, GIFT City.

“Progressive banking regulations in GIFT IFSC provide new business opportunities in several areas for foreign banks such as FPI Business, Non-Deliverable Forwards (NDF), Aircraft leasing- financing, and upcoming framework to enable international bullion exchange operations from GIFT IFSC,” he said.

Deutsche Bank is among the largest international banks in India.

It had set up its first branch in the country in Mumbai more than 40 years ago.

“With borders between global financial centres increasingly blurring, establishing a presence at the IFSC in GIFT City was the next logical step for us as we seek to support the growth aspirations of our clients.

“The banking unit will allow us to expand the services available to our clients to smoothly carry out international business transactions, particularly in the areas of financing, trade and currencies,” said Kaushik Shaparia, CEO, Deutsche Bank India.

Deutsche Bank has deployed capital over Rs 19,000 crore in its India branch operations.

The foreign lender currently employs more than 18,000 people across its various entities in the country, the release said.

Set up in 2015, International Financial Services Centre in GIFT City has attracted international and domestic players across the financial services spectrum, such as banks, asset management companies, alternate investment funds and professional services firms.

Banking transactions at the GIFT IFSC crossed USD 100 billion value by the end of July 2021, the release added.



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Russell Gaitonde, Deloitte, BFSI News, ET BFSI

Personal Finance

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Russell Gaitonde, Partner at Deloitte said, “This year’s budget was a fairly difficult act that the government had to achieve given that this year was a very unusual one with the global pandemic. The economy needed a lot of fiscal stimulus to get back on the path of recovery and i am glad that the hon’ble finance minister has gone down the path of giving the requisite fiscal stimuluses in terms of the investments proposed to be made in the infrastructure sector as well as the PSU divestments plans and recapitalisation of PSB banks. It is a road map that the FM has put out saying that the government intends to bring down the fiscal deficit to 4.9% by FY26. It’ll take around 5 years for the government to bring down the fiscal deficit but clearly there is an intention and path they have in mind.”

He added, “If you look at the budget in terms of balancing the books, the FM had to raise funds from somewhere. One option was to either increase the taxes or to effectively do it by way of a divestment plan. Had there been an increase in taxes which the FM has not done, there would have been a lot of human cry and created a negative sentiment. To balance that out the plan of the government is to go down the path of disinvestments which is the right thing to do.”

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