Mumbai has miles to go before becoming a global financial hub

It would be a long winter before the island city, Mumbai, transforms to an international financial centre (IFC), Narsee Munjee, chairman of Development Credit Bank (DCB), Tuesday said. Talking to FE on the sidelines of a seminar, ?Building world class cities?, Munjee said it may take a long time for the city like Mumbai to get an IFC status. Earlier, while addressing the seminar, Munjee referred to a report prepared by ACG for the World Bank and suggested measures to improve investor-perception that he felt was a stumbling block.

Among the five-point recommendations made by him, strong legal system and framework topped the chart.He advised banks to go for quality and financiable projects. ??They must do a thorough due diligence before deciding on a project,” he said.

The seminar was held on the occasion of the Mumbai visit of the Lord Mayor of the City of London. Talking about the rationale behind public private participation (PPP) in infrastructure, Munjee said that idea behind it was to get value for money. Mayor of the City of London, Alderman Davis Lewis, said that PPP was not free infrastructure nor is it privatisation.

??It is improving people’s lives here now and not when the state can afford it in future,” he said. The government of Goa has sought to access the expertise of the City of London which will help to provide finance and expert proposals to realise the infrastructure development vision of the state, Lewis said.

Narinder Nayar, chairman of Bombay First, an NGO which claims to have submitted its report first of all on the issue of transformation of Mumbai into IFC, said the sluggish progress was brought to the notice of the Prime Minister, Manmohan Singh during his Mumbai visit in July last year. The government set up another committee in August last year under the leadership of Raghuram Rajan to study the causes of delay. The committee has finally submitted its report a week ago.

The committee has recommended full convertibility of the rupee and improving the depth of the corporate bond market. In addition the committee has also recommended the dilution of government stake in public sector banks.