Asserting that the International Financial Services Centre (IFSC) in the city will be feasible, Maharashtra Chief Minister Devendra Fadnavis today said the planned centre in BKC can co-exist with the already notified GIFT City in Ahmedabad by partnering with it.
Speaking a day after the task force on IFSC held its second meeting, Fadnavis said it has been decided to partner with GIFT given the financial capital’s limitations and work in a “hub and spoke” model.
“GIFT and Mumbai can co-exist. Mumbai has a problem of area, so in Mumbai you can develop an IFSC say in 50 acres. But, if you want to scale it up, you have to locate it elsewhere. So, the hub and spoke model can be there. Mumbai has inherent strength which nobody can take away.
“If an IFSC is developed elsewhere, lets say a GIFT centre is developed, then both can compliment each other, both can co-exist and I think both can grow,” he added.
“I think feasibility is not a problem,” Fadnavis asserted, pointing out that even though it is not notified as an IFSC formally, Mumbai is recognised as the country’s top financial services centre by global rating agencies.
He said ICICI Bank’s MD and Chief Executive Chanda Kochhar made a presentation before the meeting chaired by Union Minister of State for Finance Jayant Sinha, which impressed the strengths of Mumbai as a financial services arena as recognised by rating agencies.
Soon after coming to power, the Centre gave a go-ahead for an IFSC at the GIFT City in Prime Minister Narendra Modi’s home state Gujarat. The financial sector regulators chipped-in by making necessary amendments in the laws.
Even though located physically within the country, an IFSC operates like a truly international area, with separate set of laws. The financial activities are undertaken in international currencies and separate books are maintained.
Major cities in the world associated with high finance, including New York, London, Dubai and Shanghai, have such IFSCs. But nowhere else do two IFSCs exist in such a close proximity as Mumbai and Ahmedabad, located only 500 kms away, which has raised question marks over feasibility.
The BKC, where the IFSC is proposed, already has country headquarters or offices of many financial sector participants, including SBI, Citibank and Standard Chartered.
Fadnavis today said there can be sister relationships with IFSCs given the difficulties of operating in the city.
When asked if the Mumbai IFSC will partner with GIFT City, he said, “If we could collaborate with multiple IFSCs and have sister kind of relationship, that would be better. Ultimately after deliberations, we thought that we should not restrict us to just one. But we should have multiple relationships with multiple IFSCs.”
Chief Secretary Swadheen Kshatriya said names of many IFSCs, including those at Tokyo, Shanghai, New York and London, were discussed at the meeting.
Meanwhile, Fadnavis said the task force deliberated on the model of the special economic zone and how to approach the Centre for permission and added that details on this will be known in a month.
Modalities for having a master plan for the IFSC, including the document of request for proposal (RFP) were discussed yesterday, he said, adding that already over 20 planners have shown interest.