Mumbai's long-pending plan to have an International Finance Services Centre (IFSC), much like London and Dubai, may not be a pipe dream after all.
Maharashtra chief minister Devendra Fadnavis on Thursday revived the seven-year-old proposal by setting up a high-powered task force — co-chaired by CEO of Deutsche Bank Anshu Jain and State Bank of India chairperson Arundhati Bhattacharya — to lay down a road map for the plan.
The task force has been asked to provide a legal and regulatory framework — taxation laws, dispute mechanisms — to set up a credible IFSC in the city that can compete with London and New York.
In the first phase, the IFSC will be set up on a 20-hectare plot already demarcated at Bandra-Kurla Complex (BKC). The BKC centre will be created as a financial services walk-to-work city, with world-class infrastructure. However, the wider consensus among officials and bankers is that there should be a wider system — like in London, where four to five mini hubs exist and offer different aspects of financial services, including insurance, investment banking and treasury services.
It is likely that along with BKC, other financial services hubs will come up in the Mumbai Metropolitan Region (MMR) soon, including one proposed at the airport city near Panvel and another on Thane-Belapur Road. The IFSC in Mumbai will have to compete with Gujarat International Finance Tec-City (GIFT) — a finance SEZ spread across 885 acres — near Ahmedabad, already announced as the country’s first IFSC by the Centre.
“While Mumbai has a natural advantage over the rest of the country, significant soft and hard infrastructure improvement is required to attract global talent. Taxation laws and dispute mechanisms form the spine of such a hub. Once the task force gives its recommendation, the state will have to move the Centre for requisite legislation. Fadnavis has taken up the responsibility of coordinating with the Centre to ensure enabling laws get passed,’’ said a senior official, present at the meeting held on the IFSC at the state secretariat on Thursday.
In the short term, the task force — it will rely on guidelines laid down by the Reserve Bank of India to set up the Gujarat International Finance Tec-City (GIFT) as a financial centre — will prepare the framework to set up an off-shore banking and insurance centre in the city. In the long term, planners hope the Centre will take decisions on rupee convertibility to allow a fully functional IFSC.
The task force also has senior government officials, including principal secretary to the CM, Praveen Pardeshi, Mumbai Metropolitan Region Development Authority (MMRDA) commissioner UPS Madan, officer on special duty to CM Kaustubh Dhavse, besides one major international and domestic fund manager as its other members. The first meeting of this task force will be held in July, where Fadnavis, Jain and the RBI governor are expected to develop an action plan.