MUFG Bank gets IFSCA nod to open a branch at GIFT City 

BL Ahmedabad Bureau | Updated on: May 26, 2022

Japanese lender will set up foreign currency-denominated lending business 

Japan's MUFG Bank will soon start lending operations in foreign currencies from the GIFT-IFSC at GIFT City in Gujarat.

Mitsubishi UFJ Financial Group, Inc. (MUFG)'s MUFG Bank, Ltd on Thursday informed that it has received a approval from regulators in India and Japan, the International Financial Services Centres Authority (IFSCA) and the Financial Services Agency (FSA) respectively.

MUFG Bank has become the first Japanese bank to obtain approval to open a branch in the Gujarat International Finance Tec-City (GIFT City). The scheduled opening of the branch is the first half of fiscal 2022.

"We will proceed with preparations to open the GIFT Branch," the MUFG Bank said in a statement adding that it will undertake the foreign currency-denominated lending business at the GIFT branch.

Future growth

In India, regulations in-principle prohibit extending foreign currency-denominated loans, but GIFT City provides an opportunity to book India-linked offshore business within India which, we believe, will enable us to meet diverse funding needs of customers in a market where future growth is expected, the statement said.

In addition, foreign currency lending operations, hitherto mainly conducted from outside India, can now be processed within the country. This, together with an expected simplification of procedures, will improve diversity and mobility in financing in India, enabling clients to benefit from improved financial services, it said.

MUFG Bank provides financial services to its clients in India since the establishment of the current Mumbai Branch in 1953.

In March 2022 the Japanese lender had announced the establishment of a $300-million investment fund MUFG Ganesha Fund [1] for startups in India.

Presently, MUFG Bank has five branches in India, one each at New Delhi, Mumbai, Chennai, Bengaluru and Neemrana. The GIFT Branch will be its sixth branch in India. "We will make the most of this network, the largest of any Japanese bank in India, and work to provide even more extensive enriched financial services so as to live up to clients’ needs better than ever before," it said.

To encourage investments in GIFT IFSC, the government has rolled out tax incentives, such as a zero withholding tax and a 10-year corporate tax holiday, which have led many foreign financial institutions to open offices in GIFT City.

Tapan Ray, MD & Group CEO GIFT City, commented, "With this important addition, the international banking ecosystem in GIFT City will further strengthen, showcasing the rising significance of GIFT IFSC. We are confident that other Japanese financial institutions would also consider marking their presence in GIFT City."

Published on May 26, 2022
COMMENTS
This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you