The country's first International Financial Services Centre (IFSC) has become operational at the Gujarat International Finance Tec-City (GIFT) with the launch of the country's first IFSC banking unit (IBU) set up by YES BANK.
Four more banks—State Bank of India, IDBI Bank, IndusInd Bank and Federal Bank—have also received a final approval from the Reserve Bank of India (RBI) and will be starting their IBU operations soon. Over 15 financial institutions have been allocated space at the GIFT IFSC.
The IFSC at GIFT is attracting a lot of interest from the BFSI sector in India, especially from banks, insurance companies and other financial services players who want to tap the global markets.
An IFSC banking unit (IBU) allows an Indian bank to deliver a complete range of products to its clients with foreign currency funding requirements. These IBUs can offer products such as external commercial borrowings to its customers. It 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.