Indian banks make a beeline for space in Gujarat’s Gift City
Bank of India, Bank of Baroda, Corporation Bank, Punjab & Sind Bank, HDFC Bank and many others have signed up for space in Gujarat’s International Finance Tec-City (also known as Gift City).
In fact, banks are expected to be the first to kick off operations in 2016/17, when the International Financial Services Centre (IFSC) would start competing with financial centres of Singapore, Hong Kong and Dubai.
The pet project of Prime Minister Narendra Modi – when he was the chief minister of the state – has been witnessing hectic activity ever since the BJP-led NDA government came to power about a year ago.
In the past three months, the Reserve Bank of India (RBI), Securities and Exchange Board of India (Sebi) and IRDA have issued a regulatory framework for operating bank branches, run stock exchanges and insurance business. The IFSC would be a deemed foreign territory offering low tax taxation and also a separate (faster) dispute resolution system.
The Gift project, spread over 886 acres, has a multi-service special economic zone, which will house the IFSC. The IFSC will have commodity exchanges, equity exchanges, offshore banking, KPO, BPO, data centre, etc. There is also a domestic finance centre and space for other infrastructural facilities (housing, club, hotels) for people who will work at the IFSC.
The country’s largest bank, State Bank of India (SBI), has taken 0.2 million sq. ft built up area, and construction will start shortly. The cost of SBI’s commercial tower is estimated to be Rs 150 crore.
There are also non bank players like Life Insurance Corporation of India (LIC), exchanges BSE and NSE, and real estate and hospitality players like Mumbai-based Hiranandani, Bangalore-based Brigade etc., who have either bought a place or are in discussion with Gift city.
State owned LIC has booked 12.6 million sq. ft area. In fact, LIC has recently requested for expanding the area to 12.8 million square feet.” We will be giving a letter of allotment shortly to LIC,” said a top official of Gift City.
For BSE and NSE exchanges, the space in IFSC is not finalised. BSE Broker’s Forum, however, has taken space of around 0.5 million sq. ft for a commercial tower in the Gift City.
Ahmedabad based Sterling Group will be setting up a 200 bed multi speciality hospital. Noida-based World Trade Centre has taken 1.5 million square feet of space. Tata Communications will be setting up a data centre.
However, interest has been limited mainly from domestic companies so far, as foreign companies need clarity on issues like taxation and dispute resolution system.