The Maharashtra government has planned to replicate London’s ‘hub and spoke’ model to set up an international financial service centre (IFSC) in Mumbai, the country’s business capital.
It is working on its idea to set up the main hub in the Bandra-Kurla Complex, while setting up several mini-hubs for regional players. The London global financial centre operates on a similar model.
Pushing for Mumbai as an IFSC, Maharashtra Chief Minister Devendra Fadnavis on Friday announced the appointment of a high-powered task force to chart out a proper roadmap for the IFSC plan.
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The task force will be jointly headed by Deutsche Bank CEO Anshu Jain and State Bank of India chairperson Arundhati Bhattacharya. The task force will also include an international and a domestic fund manager. The CMO said they would be nominated separately. Four senior government officials, including Additional Chief Secretary (finance) Sudhir Shrivastav, Metropolitan Commissioner U P S Madan, Principal Secretary to the CM Pravin Pardeshi and Officer on Special Duty (CMO) Kaustubh Dhavase, will also be part of the taskforce.
“The main terms of reference of the task force are to chalk out the roadmap and the course of action. They would have to identify quick wins to develop Mumbai as an IFSC. The task force will regularly seek advice on regulatory framework from the Reserve Bank of India,” a communication from the CMO said.
The decisions come following a high-level meeting convened by Fadnavis on the IFSC plan on Friday evening. Jain, who was in London, participated in the meeting via a video conferencing facility, whereas representatives from the SBI and RBI were present for the meeting held at the CM’s official residence in South Mumbai. During the meeting, it was decided that the IFSC plan can materialise only if individual and corporate tax laws in the country were amended, making them investment-friendly to attract fund managers to operate offshore. The need to set up an arbitration centre for dispute resolution on the lines of London was also identified as a basic requirement.
The participants concluded that while Mumbai enjoyed a clear advantage over the rest of the country as an IFSC, significant improvement was necessary in its soft and hard infrastructure to attract global players. Agreeing to push for changes in taxation norms with the Centre, Fadnavis later tweeted, “The state has an important responsibility to work closely with the Centre to create a framework that makes Mumbai a credible competitor among other IFSCs.”
He also said that the taskforce would meet in Mumbai in July. The government has been under pressure to promote the city as an IFSC after the Centre snubbed Mumbai and opted for the Gujarat International Finance Tech-City to set up the country’s first global financial centre, an idea born for Mumbai’s cause.