Last year in February, India’s first International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT City) crossed $100 million worth of business transactions by two banks within three months of the respective launches of their IFSC Banking Units (IBUs) at GIFT IFSC. YES Bank and Federal Bank have generated $100 million worth of business from their IBUs at GIFT IFSC.
Three private sector lenders — ICICI Bank, YES Bank and Federal Bank — have already set up branches there and State Bank of India, IDBI Bank and IndusInd Bank have received regulatory clearance and will start operations soon.
YES Bank was the first to set up its IBU at GIFT City in October 2015 while Federal Bank started functions in November year.
According to news reports, 15 more banks plan to start operations at GIFT City. Insurance companies New India Assurance and General Insurance Corporation are also in advanced stages of completing applications to regulators. Re-insurers, including Lloyds, Munich Re and Swiss Re, are also reportedly interested in starting business from the IFSC.
Further, GIFT City said in a statement in February that business transaction from the Financial Services Centre (IFSC) would in all probability cross $1 billion by June.
Now, companies have more incentive to look at setting up shop in GIFT City.
The latest budget had announced ushered in tax breaks in the Budget for companies in IFSCs. These include MAT (minimum alternate tax) at 9 per cent, waiving of dividend distribution tax, and exemption from securities transaction tax, commodities transaction tax and long-term capital gains on specified transactions.