GIFT City – An Aspiration of Modern India

Intellect Design Area Ltd. has also been granted TechFin Authorization. They will provide cloud ready invoice processing platform to global BFSI clients

K. Rajaraman, Chairperson, International Financial Services Centre Authority

FinTech BizNews Service

Mumbai, January 11, 2024: K. Rajaraman, IAS, Chairperson, IFSCA mad very insightful speech at Vibrant Gujarat Global Summit on Thursday on the theme of ‘GIFT City – An Aspiration of Modern India.’

Here is the complete text of K. Rajaraman’s address:

Hon’ble Finance Minister of India, Smt. Nirmala Sitharaman, Hon’ble Finance Minister of Gujarat, Sh. Kanubhai Desai, Chairperson, GIFT City, Sh. Hasmukh Adhia, MD & CEO GIFT City, Sh. Tapan Ray, global business leaders from the world of finance and technology, distinguished delegates from various parts of the world and from different states of India, it is indeed a great honour for me to welcome all of you at this special seminar. GIFT City, which houses India’s 1st “International Financial Services Centre (IFSC)” has had a transformative impact on redefining the global landscape of new and emerging global financial centres. Today, GIFT IFSC is standing as a shining example of India’s firm commitment to undertake deep, ambitious, and bold financial sector reforms to attract global financial services business and become a global leader in the domain of international finance.

As we enter into the “Amrit Kaal”, a period of immense potential and promise, Hon’ble Prime Minister has energized the nation with the resolve to transform India into a developed nation, ie., Viksit Bharat by the year 2047. Hon’ble Prime Minister, who is also the architect of GIFT IFSC, has envisioned GIFT IFSC as the Bharat’s Gateway to access Financial Capital and New Age Financial Services for Viksit Bharat@2047. Bharat by one estimate will need USD 18 trillion of net capital inflows to facilitate realization of the our vision to make it a developed nation. Therefore, the vision for GIFT IFSC goes much beyond the realm of traditional finance. We are not just creating a financial center; we are building a gateway for investors to make a soft landing, launch global businesses and benefit from India's remarkable growth story.

Yesterday evening, the Hon’ble Prime Minister while addressing a Roundtable of Global Investors at GIFT IFSC emphasized the need to benchmark our regulations to the best jurisdictions in the world, nothing less. Our endevour will be to develop GIFT IFSC as a centre of excellence, to enable Bharat to become Atma Nirbhar, self-reliant, in the realm of international financial services but also contribute constructively in shaping the future of global finance. IFSCA has a statutory process of updating its regulations once in 3 years and therefore I look forward to constructive and transformative suggestions from all of you on policy and regulation.

International Financial Services Centres Authority has been established as a unified regulatory authority for development and regulation of financial markets within GIFT IFSC through an Act of Parliament. We are driven by a clear mission of creating a globally aligned regulatory regime that promotes innovation, efficiency, and robust governance. In the last 3 years, IFSCA has notified nearly 40 regulations and frameworks for enabling various financial services businesses including Banking, Funds, Insurance, Capital Markets, Fintech, Bullion Exchange, Aircraft and Ship Leasing, and many more.

Under the strategic guidance of the Hon’ble Finance Minister, a number of new initiatives are under progress. We are working on a Single Window IT System that will enable all regulatory clearances to be provided online. This system is expected to go live by March 2024.

It gives me immense pleasure to share some notable achievements made across various sectors in GIFT IFSC:

In the Banking Sector, which acts as the life blood of any global financial centre, we are witnessing sustained growth with growing concentration of foreign and domestic banks. The Cumulative Banking Asset size has for the 1st time crossed USD 50 Bn mark and stood at USD 52 Bn in Dec. 2023. We are also happy to share that Mizuho Bank has become the 2nd Japanese bank to receive Banking License from IFSCA. Mizuho is one of the big three banks of Japan and a Global Systemically Important Bank (G-SIB). Their presence marks a major milestone in strong and growing India-Japan collaboration.

The funds and asset management industry has been one of the most successful business segments in GIFT IFSC. With IFSCA notifying a comprehensive regulation for Fund Management in April 2022, we have witnessed sustained growth in pooling of global capital into fund structures set up in IFSC. I now take this opportunity to announce that IFSCA has authorized the 100th Fund in GIFT IFSC in a short span of 3 years, infact the number of funds have doubled from April 2023. The 100th Fund authorization has been granted by IFSCA to Chiratae Ventures International Fund-V, a Private Equity fund with a targeted corpus of USD 350 Million and will primarily invest in Indian markets. The Asset Management industry in GIFT IFSC is now maturing with a healthy mix of 86 Fund Management Entities, which have launched 100 funds with a cumulative targeted corpus of USD 29 Bn.

So far over USD 700 mn has been lent by IFSC banks as sustainable finance. Over USD 12 billion worth of sustainable bonds have been listed in GIFT. We shall be working towards making IFSC a Climate Finance Hub for India and the Global South. Towards that, two Expert Committees have been set up to make recommendations on establishing a Voluntary Carbon market and making IFSC a Climate Finance Hub.

I also take this opportunity to announce another important milestone for the asset management industry. Morgan Stanley, a leading global financial services group with its parent company based in the United States of America, has commenced operations of their Fund Management Entity in the GIFT IFSC. They are in the process of launching a Fund/Scheme to undertake investments into Indian as well as overseas markets. We are also happy to announce that National Investment and Infrastructure Fund Limited (NIIF) a collaborative investment platform for international and Indian investors, anchored by the Government of India has been granted to authorization to establish a Fund Management Entity (FME).

The growth of asset management industry in GIFT IFSC is being adequately supported by strong growth ancillary services industry. Apex Group, a leading provider of fund administration and related services in GIFT IFSC, is now expanding its business operations as an Ancillary Services Provider. They will now be undertaking fund administration services for their global clients and create employment opportunities for over 300 professionals in IFSC.

Madam, Finance Minister, the Government of India’s vision to make GIFT IFSC “A Global Aircraft leasing Hub” was announced by you in the Union Budget 2020-21. Now, I am happy to share that the IFSC leasing ecosystem has got a major boost with Air India’s leasing arm, Air India Fleet Services Ltd. executing lease agreements for 6 A-350 wide bodied aircrafts. These aircrafts would be deployed in India and the delivery is expected to be completed by year end. Air India has also informed that the combined value of the six aircrafts leased from IFSC stood at over USD 1 Bn. The aircraft leasing ecosystem, which is growing rapidly, comprises of 28 leasing entities which have leased 128+ assets from IFSC. On similar lines, we are also witnessing tremendous traction in the growth of ship leasing business in GIFT IFSC with 10 ship leasing entities registered with the IFSCA and many prominent names at an advance stage of seeking regulatory approval. We are working towards facilitating ship and aircraft financing to happen in GIFT IFSC.

I am also delighted to share that over the course of last 1 year, we have received tremendous response from leading Public Sector Enterprises, which are now looking to consolidate their overseas financial services business in GIFT IFSC. Yesterday, we had the opportunity to inaugurate the “Global Corporate Treasury Centre” of OVL Overseas IFSC Ltd., wholly owned subsidiary of ONGC Videsh Ltd. in GIFT IFSC. Their Treasury Centre will manage the treasury operations of 25 overseas subsidiaries of ONGC Videsh Ltd. and they are also expected to raise close to USD 4 Billion over the coming years. Another leading Oil Sector PSU, Indian Oil Corporation has commenced operations of their Global Corporate Treasury Centre in GIFT IFSC. They too will manage treasury operations of IOCL’s overseas assets and are expected to raise USD 5 Bn from GIFT IFSC. I also invite other Public Sector Enterprises to explore wide array of opportunities in GIFT IFSC. A conference of all CPSEs, State PSEs and National Cooperatives is being organized at GIFT on 23rd February to showcase success stories and explore new ways of enabling PSEs to use GIFT as a platform to consolidate, or launch Global Businesses, extract cost efficiencies in financing and access structured products.

Today’s event at the Vibrant Gujrat Summit assumes even greater significance for all of us at GIFT and IFSCA, as we mark a very important milestone in the Government of India’s vision to transform GIFT IFSC as a “International Higher Education Hub” which will contribute immensely towards skilling and upgrading the Indian youth for job ready competences and skill-sets. Deakin University a leading University from Australia, with QS World Universities Ranking of 233, has become the 1st foreign university to receive final registration from IFSCA for their International Branch Campus in GIFT IFSC. They would begin their 1st academic year from July 2024, by offering two master’s courses on Business Analytics and Cyber Security. The University of Wollongong, another leading University from Australia has been granted inprinciple approval and would also be commencing their 1st academic batch from July 2024. I would also like to mention that in order to facilitate world class foreign universities to set up international branch campuses, IFSCA has recently permitted IBCs to avail infrastructure services from Academic Infrastructure Service Providers (AISPs). This recent enablement will allow foreign universities to effectively utilize plug and play campus infrastructure developed by reputed global players in IFSC.

The FinTech sector is another priority area for us and our endeavour has been to work towards achieving the vision of the Hon’ble PM, who recently at our flagship Infinity Forum 2.0 event stated that “GIFT City has the potential to become the Gateway to the Global FinTech World and a Fintech Laboratory for the world”. We are also happy to share that Intellect Design Area Ltd. has also been granted TechFin Authorization. They will provide cloud ready invoice processing platform to global BFSI clients and create employment opportunities for 100 + professionals.

While we do all the above, IFSCA is also working towards ensuring that market regulations are honored in practice. We are strengthening supervision and ensure that investors enjoy strong protection. We have globally benchmarked AML CFT regulations and the recent FATF review has confirmed has given us confidence.

The year gone by, 2023, has been a transformative year in GIFT IFSC journey towards becoming a “nerve centre for new age global financial services”. The year in front, 2024, has now opening new opportunities and avenues for global financial services firms to seamlessly connect with the Indian economy. I invite all of you to keenly explore GIFT IFSC opportunities, we would be very happy to support you in all our endeavours. Thank you, jai hind.

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