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Kotak Mahindra Bank Ltd, on Tuesday, became the fourth bank to open its IFSC Banking Unit (IBU) at India’s first and only International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT) City.
The private sector banking and financial major offers a range of financial services, including transaction banking. It also operates lending verticals, manages IPOs, and provides working capital loans. At IBU, the bank expects a balance sheet of $one billion in the next three years.
With over $250 million worth of business transactions done at IFSC in the past six months, GIFT is attracting interest from the BFSI sector in India, especially from banks, insurance companies and other financial services players who want to tap the global markets.
IBU allows an Indian bank to deliver a complete range of products to its clients with foreign currency funding requirements. It can offer products such as external commercial borrowings (ECBs) to its customers, an area where it had limited capabilities hitherto.
IBU will also be able to meet the funding requirements of overseas entities which may be joint ventures or subsidiaries of its domestic clients or part of the value chain of its existing customers, said Ajay Pandey, Managing Director and Group CEO of GIFT Company Ltd.
GIFT is seen as a major game changer for the financial services sector in India. Major tax incentives announced in the last Union Budget have made the IFSC at GIFT a globally competitive player and more BFSI players are swarming to this new global financial hub, he added.
KVS Manian, President, Corporate, Institutional and Investment Banking, Kotak Mahindra Bank, said that Indian corporates have expanded business operations across geographies, which in turn has led to increased requirement for financial products and services in overseas markets.
“Our IBU in GIFT City will cater to this growing demand. It will offer ECBs, buyers’ credit for imports, and factoring of export receivables for Indian corporates in international markets.''
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