Federal Bank, Yes Bank, ICICI Bank and Kotak Bank have emerged as first movers in initiating GIFT (Gujarat International Finance Tec) City operations. GIFT City has been developed to meet various offshore banking requirements of Indian companies with overseas operations. The newest of these offshore banking branches was opened by Kotak Bank, while Yes Bank, ICICI Bank and Federal Bank branches in GIFT City have been operational for a few months already.
By being among the first movers, these banks expect to benefit from the reduced operation costs, simplified regulations and opportunity to raise capital in foreign currency – the key selling points of the GIFT City initiative. Subsequent to initiation of its GIFT City operations a few months back, Yes Bank has collected and lent capital to the tune of $225 million and expects this amount to double by March-end, 2017. The key borrowers for Yes Bank have included overseas joint ventures and overseas subsidiaries of companies based out of India.
Federal Bank also announced that it had achieved a turnover of $40 million after its GIFT city operations were initiated. Though data from ICICI Bank has not been made public, according to GIFT City regulations, a minimum capital of $20 million needs to be raised by the bank to initiate these operations. Kotak Banks’ IBU (IFSC Banking Unit) is one of the newest in GIFT City and the bank hopes to replicate and subsequently surpass the success of its competitors in this emerging international finance domain.