The Finance Ministry has asked the banks and insurance companies to consider setting up operations at Gujarat International Finance Tec-City (GIFT), the country’s first International Finance Centre (IFSC) coming up near Ahmedabad.
Financial services secretary Hasmukh Adhia had recently written to the chiefs of banks and insurance firms to make use of the opportunities available in the GIFT City. Expecting big tax breaks on the lines of Dubai and Singapore, a host of banks and insurers like SBI, Bank of India, New India Assurance, GIC Re, United Insurance and Life Insurance Corporation (LIC) and SBI Life have already decided to have their presence in the GIFT City. There are big expectations among lenders and insurers about a low tax regime in IFSC in order to compete with other Asian IFSCs. Dubai has no tax, Malaysia 10 per cent and Singapore has three per cent tax.
Bank of India has already bought two floors at GIFT as it plans to open either information technology processing centre or just a zonal office there, a senior BoI official said. GIC Re, the country’s sole reinsurer, which almost gets 50 per cent of premium income from international markets is currently examining what kind of business it can do at GIFT. “We will be in the GIFT very soon. We are examining what kind of business we can do. For GIFT City, we will go beyond our inward business. We are also waiting for the clarity on tax front,” said said AK Roy, GIC Re chairman and managing director.
GIC and others are hoping to have the first mover advantage in setting up operations in GIFT City. “We are also looking at kicking off certain operation at GIFT so as to provide reinsurance support to the companies there,” New India Assurance chairman and managing director G Srinivasan said. “I am sure that a model similar to the already existing model in countries like Malaysia and Singapore will be developed at GIFT.”
State-owned LIC has booked 12.6 million sq. ft area. In fact, LIC has recently requested for expanding the area.
Global group, promoted by insurance professional Prabodh Thakker, is building a knowledge centre at GIFT with an investment of Rs 125 crore for developing BFSI professionals. “We will be developing the centre with an investment of Rs 125 crore and we are receiving a lot of encouraging support from both national and international levels to support the initiative,” Thakker said adding that the centre will have necessary technical and strategic tie-up with other global institutions and will be ready by 2016.
Even private players are also looking at the first Indian IFSC. “We’re happy to have an IFSC where ever. We will participate in those centre or centres where ever they are. Mumbai’s ecosystem has developed. Mumbai always has that natural advantage in finance. Any other centre will have to work harder to build the ecosystem,” Kotak Mahindra group chief Uday Kotak said.
GIFT is planned as a financial central business district (CBD) between Ahmedabad and Gandhinagar. It is designed as a hub for the global financial services sector with state-of-the-art connectivity, infrastructure and transportation access being integrated into the design of the city.
Gift plans In Key Points
1. Expecting big tax breaks, a host of banks and insurers like SBI, Bank of India, New India Assurance, GIC Re, United Insurance and Life Insurance Corporation (LIC) and SBI Life have already decided to have their presence in the GIFT City
2. Bank of India has already bought two floors at GIFT as it plans to open either information technology processing centre or just a zonal office there
3. Global group, promoted by Prabodh Thakker, is building a knowledge centre at GIFT with an investment of Rs 125 crore for developing BFSI professionals