Banking assets in India's international financial hub have surged about 60% since June, a top official said, as growth in the nation's credit markets boosts GIFT City, which is competing with Singapore and Hong Kong in attracting foreign capital. Assets held by banks in the hub have reached about $193 billion as of end-September, according to K. Rajaraman, chairman of the International Financial Services Centres Authority, speaking in an interview with Bloomberg Television. That compares with $120.69 billion as of June, according to data published by IFSCA.
"Sustained growth has come through credit markets, especially offered by the banks," Rajaraman said. He said the increase in banking assets was primarily due to foreign currency deposits and external commercial borrowings. Banks in the hub are poised to become one of the biggest sources of capital for Indian companies seeking to fund domestic operations and global expansion, he said. The Reserve Bank of India's special swap facility for foreign-currency non-resident deposits, which ran from June until the end of August, helped boost activity in GIFT City, the Gujarat International Finance Tec-City.
The economic zone, where HSBC Holdings Plc, Standard Chartered Plc and Mitsubishi UFJ Financial Group Inc. have built large businesses, offers exemptions from certain taxes and regulatory restrictions, boosting its appeal as an international capital-raising venue. Asset managers including Mirae Asset Investment Managers (India) and Jio BlackRock Asset Management have also set up operations there.
The rapid growth comes as authorities address concerns over tax policy in the hub. Some investment funds in GIFT City have recently received tax notices for the 2024-25 and 2025-26 assessment years despite exemptions available to such entities, raising questions about the implementation of tax incentives central to the hub's appeal, according to a local media report. Rajaraman said the government and IFSCA are working together to ensure that tax incentives and other policies meant to draw in and keep multinational companies are being implemented. Authorities also plan to allow Indian companies to tap global investors through dual listings in GIFT City, with the Securities and Exchange Board of India and IFSCA working on the framework. "Dual listing is certainly a goal," Rajaraman said.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing