The decision to open in the India hub shows how the centre is positioning itself to win cross-border business, putting itself to some extent in competition with places such as Dubai, Mauritius and Singapore.
Sumitomo
Mitsui Banking Corporation (SMBC) has obtained approval to
open a branch in an Indian financial services hub.
The Japanese group has secured regulatory clearance to open in
the Gujarat International Finance Tec-City – aka GIFT City – from
the International Financial Services Centres Authority in India
and the Financial Services Agency in Japan.
The GIFT City hub comprises an offshore special economic zone,
benefiting from tax incentives such as zero withholding tax which
in principle applies to offshore foreign currency-denominated
borrowing from outside India. Other incentives offered by
the hub include exemption from stamp duty and exemption from
goods and services tax. Figures in the wealth management sector,
such as Simon Hopkins of Milltrust, have
told this news service that this centre has large potential.
“GIFT City presents an opportunity for the bank to manage
offshore business linked to India from within the country,
enabling us to cater to the diverse and growing needs of our
clients,” SMBC, which has been operating in India since March
2013, said in a statement.
SMBC established its first branch in New Delhi 11 years ago, and
the Mumbai and Chennai branches opened in March 2017 and November
2020, respectively to provide financial services to its
customers.
In recent months, about eight of the 10 biggest Indian asset
managers by assets have either relocated their business, or set
up new funds or filed for permits to move to GIFT City (source:
Reuters, 9 February 2024).