CII for developing Mumbai as OFC

MUMBAI, MARCH 18: The Confederation of Indian Industry CII has stressed the need to develop Mumbai as an offshore financial centre OFC t...

MUMBAI, MARCH 18: The Confederation of Indian Industry CII has stressed the need to develop Mumbai as an offshore financial centre OFC to attract cash/foreign currency, earn higher local operating expenditure, integrate and improve creditworthiness, develop markets and above all attract high networth individuals and businesses.

Nimesh Kampani, chairman, CII Financial Services sub-committee, in a comprehensive report prepared with Coopers amp; Lybrand, said that Mumbai being the financial capital of India has a strategic location, and the ideal time zone between Singapore and London. He called upon the state government to establish Mumbai as a funding centre enroute to becoming a primary centre and amend the legal framework for setting up an OFC.

Kampani was addressing a conference on quot;Maharashtra in the Global Perspectivequot; organised here on the occasion of Maharashtra Annual Day by CII. Kampani said that a presentation in this regard would be made to the state government soon.

Kampani said that the OFCshould be free of local fiscal and exchange controls, typically conducted between foreign providers and foreign/domestic users. quot;Singapore has assets to the tune of 380 billion, Luxumberg 190 billion and Hong Kong 140 billion.quot; The assets held by OFCs in the US were worth 5 trillion compared to 1 trillion of Central Bank reserves there.

quot;There has been a change in perspective in looking at an OFC as a tax haven or store for illegal money to a network of pride,quot; Kampani said, adding that setting up an OFC would generate more job opportunities and boost development of related industries like tourism and real estate.

Kampani emphasised the need for economic and political stability, reliable and efficient legal system, pragmatic and flexible regulatory climate, efficient and experienced manpower, good communication and supportive services, basic infrastructure of a financial centre, tax treaties and minimum currency restrictions for setting up an OFC. Moreover, local capital availability,promotional efforts by the government, software technology, flexible and proactive regulatory framework and easy accessibility are also essential.

Kampani said that risks involved in the development of an OFC include vulnerability to large withdrawals and international conditions and high risk banking. quot;Despite these risks, India cannot afford to ignore the developments in China, Malaysia, Thailan and Taiwan. There is a need for an OFC to provide multiplier effect for economic development,quot; he added.

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Shashi Ruia, chairman Essar Group, called upon the state government to move aggressively into the services sector and exploit the state8217;s resources fully.

Ruia also called for development of hi-tech health care centres on the lines of Texas Medical centre, development of telecom services and Pune as a software centre.