Analyzing Value Proposition for Banking Units at India's first International Financial Services Centre (IFSC)

The paper evaluated the value proposition for the Banking units operating at the. Gujarat nternational. Finance Tec City's International Financial Services Centre (GIFT-IFSC). The study finds out the amount of business taking place overseas by the virtue of increasing need of international banking activities. A comparison in terms of regulations, activities being carried out and technological support provide to the overseas banking units operating at the Dubai International Financial Centre DIFC, Singapore International. Financial. Centre and Hong Kong International Financial. Centre brings out the advantages and drawbacks of GIFT-IFSC.

In terms of regulations as compared to DIFC, Singapore International. Financial. Centre and Hong Kong. International. Financial Centre, GIFT IFSC has competitive regulations to support the IFSC banking units in Special Economic Zone. Study reveals that GIFT IFSC is progressing towards supporting activities of importance to the business of the banks initially. In terms of technological support India is not behind any other countries and stands at a competitive position.

It is estimated that even under conservative assumptions, purchases by Indian households and firms of IFS could reach to $120 billion by 2025. The study also resulted at a conclusion that India has appropriate pool of resources in terms of human resources, infrastructural support, cost competitiveness and vast hinterland economy to support the initiative of IFSC at GIFT.

India so far has seen a growing trend in the International Banking sector. It is seen that around Rs. 94.3 bn business in international banking sector of Indian Banks takes place abroad. This business can be targeted by operating at GIFT IFSC which would prove to be beneficial to banks in terms of ease of operating from their homeland, reduced cost and healthy regulatory environment.