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Bank of America, Citi Bank and HSBC are interested in setting up offshore branches in India’s first international financial services centre (IFC) in Gujarat. AK Jha, CEO of the forthcoming GIFT City in India’s north was quoted as conveying to the Economic Times of India.
“All Indian banks that have offshore branches are willing to set up shops here. Besides many of the foreign banks which are established in India, Bank of America, Citi Bank, HSBC are also willing to set up their offshore branches in IFC. They have a great business opportunity in this,” Jha told The Economic Times.
According to Jha, and reported here on LeapRate MOU’s have already been signed with BSE and NSE for setting up their international exchanges in the new IFC. “We are also in talks with other exchanges around the world particularly, New York Stock Exchange, Singapore Stock Exchange, and London to set up their exchanges here,” Jha said. “As far as the insurance sector goes, we are in discussion with Lloyds and GIC,” Jha added.
There has been no plans for any specific FX related favoritism, but it seems likely the banks setup here will be involved with Rupee trading and settlement. Nonetheless, the groundwork is now in place, as reported earlier this month we do know that the Securities and Exchange Board of India (SEBI) has laid down certain operating rules to facilitate the takeoff of the country’s first international financial services centre in Gujarat starting next month.
The capital market regulator has relaxed net worth and shareholding limits for market intermediaries planning to open offices within the IFC and housed within the special economic zone of the Gujarat International Finance Tec-City (GIFTCity).
SEBI on March 27th allowed domestic and foreign stock exchanges and clearing corporations to form a subsidiary to provide their services by having an initial minimum net worth of Rs 25 crore (around $250m) and Rs 50 crore (around $500m), respectively, which could be enhanced to Rs 100 crore (around $1b) and Rs 300 crore (around $3b) over the period of three years from the date of approval.
The regulator has also exempted these intermediaries from certain provisions such as the stock exchange not needing to credit 25% of its profits every year to the fund of the clearing corporation which clears and settles trades executed on that exchange.
Exchanges can allow dealing in equity shares of a company incorporated outside India, depository receipts, debt securities, currency and interest rate derivatives and index-based derivatives, among others in any currency other than the Indian rupee with a specified trading lot size on their trading platform.
To read the article from The Economic Times with more details, click here.