Listen to this article
At the Cafemutual India Investment Summit 2024 recently held in Dubai, Pradeep Ramakrishnan, Executive Director, Gujarat International Finance Tech City (GIFT City) said that GIFT city’s IFSCA brings in best international practices prevalent in the financial services business to India.
In this virtual session, Pradeep pointed out that the aim of GIFT City is not to create a tax haven but build a credible jurisdiction so that it can be developed as a gateway for global fund flow in India.
This will develop GIFT City as a global hub for banking and financial services, which will be independent of Indian jurisdiction.
Current status at GIFT City
Currently Gift City is home to around 30 banks, with equal representation from domestic and international banks.
It has around 130-135 registered fund managers, 180 funds and more than 2000 investors. Further, the GIFT City also has a total investment commitment of around USD 30 million.
What does unified regulation mean?
Unlike the domestic jurisdiction where all the verticals like mutual funds, banking services and insurance are regulated by separate regulators, GIFT City will have a single regulator to regulate all the verticals in the financial services.
Unified regulator also results in unified regulatory practices in sync with broader global practices. Also, the registered entities in GIFT City can indulge in various businesses after achieving one single license from the International Financial Service Centres Authority (IFSCA).
Fund management regulations
Pradeep said that the IFSCA is focusing to facilitate the ease of doing business in the mutual fund business. The provision of registration and collection of funds at the same time allows the fund managers to start investing at an early stage, saving processing time of around 30 to 35 days.
Furthermore, accredited investors and sovereign wealth funds also have huge opportunities in GIFT City.
What is there in the pipeline?
Commenting on the future initiative by the GIFT City, Pradeep said that the IFSCA is focusing on the development of foreign family investment funds (FIFs) and ESG funds (Environment, Social and Governance).
He said that India needs USD 10 trillion in the ESG funds and GIFT will play an important role in this segment. The GIFT IFSCA offers a fee exemption for the registration of first 10 ESG funds.
4 ESG funds have already been registered in GIFT IFSC leaving a space for six more funds that can avail the fee exemption offer.
Concluding the address, Pradeep claimed that sustainable finance is the need of the hour and mutual funds can enhance the sustainable finance ecosystem.
You can watch the session by visiting this link - https://www.youtube.com/watch?v=LoI_Cw4zj7k&list=PLMfvkrDbA3gCmKfEkwLuzFf1bEWBiUqtV&index=8.