The Times of India: May, 2015
Mumbai: Kotak Mahindra Bank has signed up with Hiranandani Communities to set up its IFSC Banking Unit in the developers project at GIFT City near Ahmedabad. Kotak Mahindra Bank will occupy premises in Hirandani Signature which will be in the International Financial Services Centre (IFSC), GIFT City.
"We've decided to take some space at the GIFT CITY. We believe that if you're able to create an International Financial Centre in India, wherever it is, we'd like to have the option of participating in that" said C Jayaram, joint MD, Kotak Mahindra Bank commenting on the deal.
An International Financial Services Centre (IFSC), although located within India, offers the facility of acting like a 'foreign operations office', which helps facilitate easy movement of capital. 'Hiranandani Signature' will provide global infrastructure in a well-planned commercial complex to meet requirements of Financial Institutions located there.
Reserve Bank of India has allowed banks to set up IFSC Banking Units or IBUs which will be akin to a foreign branch. An IBU can give dollar loans for ?M&A activity, it can bet on future movement of the dollar-rupee and do everything a multinational bank can do from outside India. Besides banking capital markets watchdog Sebi has also allowed broking firms to set up office here to service international clients.
Earlier in an interview to ToI, Uday Kotak, vice chairman, Kotak Mahindra Bank said that the bank had decided to have a presence to be prepared to tap any new opportunities. He added that a financial center would need a complete ecosystem around it.
"GIFT CITY is India's first IFSC, and 'Hiranandani Signature' has been conceived as a unique commercial real estate offering here." said Niranjan Hiranandani, Managing Director, Hiranandani Communities. "Financial Institutions will find their presence here advantageous as it will help them service foreign currency needs of their corporate clients." Hiranandani added.
GIFT CITY is designated as a Special Economic Zone (SEZ) devoted to finance and financial services. The first building is expected to be ready by June 2016. "Given India's continued economic growth, the financial sector will grow increasingly larger, with a prospect of 10 - 11 million jobs by 2020," said Niranjan Hiranandani.