Modi's Gift City Becomes More Desirable With Eased Norms
Prime Minister Narendra Modi's dream of building international financial centres that would rival their peers in London, New York, Singapore, Hong Kong and Dubai got a shot in the arm by a recent announcement of the Reserve Bank of India (RBI) early November. Under the new guidelines, commercial banks operating in India's international financial service centres (IFSCs) will be allowed to offer structured products after getting a prior approval from their respective board of directors.
Through customisation, structured products let you use traditional security link with unconventional payment features. And, at present, there are currently no structured products linked to the currency in India. While 93 per cent of products are linked to the Nifty index, the remaining are tied to government securities and gold.
Gujarat's GIFT City, the first IFSC being developed in India, is likely to become a more desirable finance destination after this. Ten banks have already applied for branches in the upcoming centre, where the PM is likely to unveil a 16-story tower in January.
Building world-class infrastructure is after all the prime concern to realise the dream of becoming a preferred destination of global financial giants. In fact, China, too, is working on a similar project, Qianhai in Shenzhen, and India will have to have an edge to compete with its Asian rival. Policy changes could be a great way of doing that.
“India is not able to fully realise its vast potential in financial services because our cities do not have the required infrastructure. If India wants to compete with international financial hubs, our cities will have to provide global standards in infrastructure, office space, internet and telephone connectivity and lifestyle opportunities which would attract top talent,” reads the GIFT City website.
“GIFT aspires to cater to India's large financial services potential by offering global firms a world-class infrastructure and facilities. It aims to attract the top talent in the country by providing the finest quality of life,” it further adds.