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Feb 16, 2016

Top Bank players to start operations in Gujarat's GIFT City soon

State Bank of India – biggest public sector bank of India and ICICI Bank the largest private sector bank are ready to kick off their journey in GIFT IFSC.Currently, 2 mid-sized private sector banks -Yes Bank & Federal Bank are already operating in GIFT City.

In an interview to Business Today, Ajay Pandey, MD and CEO, GIFT, claimed that the existing tax provisions are supportive of banks and it is easy to operate in the IFSC. He is hopeful that any improvement in the current taxation will be a booster for the banks to set up their operations in GIFT City. He claimed that the Insurance Sector would be the next big sector after Banking which will operate in GIFT City.

As per the regulations, GIFT IFSC is a deemed foreign territory which offers low taxation and also a separate and faster dispute resolution mechanism. Finance Minister Arun Jaitley had earlier categorically stated that the government is trying to frame an internationally compatible taxation regime. The government has not yet decided on the applicable tax rate.

Some of the global financial centers like Singapore, Dubai, Malaysia & Hong Kong have a very liberal taxation regime from NIL to 10%.

GIFT’s success will depend upon the taxation structure under which it operates. Experts opine that to promote GIFT, India will have to have an attractively low rate which can attract the desired foreign investments and trade.

The ambitious GIFT project, which is the vision of Prime Minister NarendraModi during his tenure as Gujarat CM, is being built over 900 acres.

GIFT City comprises of SEZ and non-SEZ area and is being developed on an integrated SMART City model. The IFSC is located in the SEZ premises and will houseBanks, Commodity Exchanges, Equity Exchanges, Insurance Giants, data centre, etc.

Many corporates and institutions have signed up for space in the GIFT IFSC and it is expected that these companies will start their operations in the near future.

 

 

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