Tag: international financial services centre

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

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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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Citibank granted IFSCA licence to set up banking unit at GIFT City, BFSI News, ET BFSI

Banking & Finance

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GIC had set up its international operations in Dubai in 2007 and had been providing reinsurance to the African continent.

Ahmedabad: US-headquartered Citibank NA has received the regulatory approval to open a banking unit at India’s only International Financial Services Centre at Gandhinagar, to carry out offshore transactions, said sources privy to the development.

This has paved the way for the first US bank to set up a branch at the Gujarat Finance Tec-City (GIFT City). “We issued a licence to Citibank on Monday to set up its IFSC banking unit at GIFT,” confirmed Dipesh Shah, development head, International Financial Services Centres Authority, the unified regulator for development and regulation of financial products, financial services and financial institutions at IFSCs.

Citibank will service both Indian and global customers from its IFSC branch. The new IFSC unit aims to undertake credit business such as execution of foreign currency loans and external commercial borrowings, working capital loans including trade finance facilities, payment/remittance as well as treasury business including borrowing and deposits, said sources.

Last year, Citibank received in-principle nod from the Reserve Bank of India for the banking unit after which it was awaiting the final nod from IFSCA to start operations.

Recently, Deutsche Bank, a global bank with presence in over 70 countries, became the first German bank to set up its IFSC banking unit at GIFT IFSC. “Global banks are finding the IFSC a great strategic opportunity to serve international clients at a very competitive cost. The IFSC is fast emerging as the preferred gateway for international financial services and is enabling many new business opportunities for global investors,” said Shah.

Leading Indian and foreign banks such as HSBC, Standard Chartered, Barclays, State Bank of India, Bank of Baroda, ICICI Bank, Axis Bank, Kotak Mahindra Bank and HDFC, among others are already operating from GIFT IFSC.



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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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BSE collaborates with GIFT SEZ to offer finance, capital mkts courses, BFSI News, ET BFSI

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New Delhi: BSE Institute, a subsidiary of leading stock exchange BSE, has joined hands with GIFT SEZ Ltd to offer courses in finance and capital markets. GIFT SEZ houses India‘s first International Financial Services Centre (IFSC).

The pact will lead to the development, launch, and conduct of programmes related to IFSC at GIFT City and help in the introduction and management of certification programmes for the market participants at GIFT IFSC, according to a statement by GIFT City on Thursday.

Also, the initiative will help in offering of courses to prepare candidates for international securities regulations certifications and organizing seminars, knowledge series and conferences for creating awareness on IFSC and GIFT City.

Tapan Ray, Managing Director and Chief Executive Officer of GIFT City, said that GIFT City is committed to develop an enabling environment for all aspects of international financial services. An important piece of this endeavor is to provide avenues for skill development and training in various areas of international products, offshore fund management, international bullion trading among others.

“We see ourselves as facilitators of not only financial services but also of honing talent for this emerging stream in India,” he added.

Ambarish Datta, the Managing Director, and CEO of BSE Institute said that an international financial services center caters to customers outside the jurisdiction of the domestic economy, dealing with flows of finance, financial products, and services across borders.

This requires us to build a pipeline of highly skilled professionals who are well versed with global financial regulations, and best practices, he added.

Since 1989, BSE Institute has been training and delivering new age employability skill and competency-based education to students to prepare them for the industry

To give an impetus to financial services education and skill development, GIFT City has taken initiative to bring onboard several reputed educational institutes and offer cutting-edge courses.



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