Increasing business has prompted Axis Bank to take up a larger space in GIFT City in Gujarat for housing its IFSC Banking Unit (IBU) which has been functional since the last seven years. The new office space inaugurated on Wednesday measures an estimated 8000 square feet and is almost three times bigger than the older space occupied by the IBU.
“Today our asset book in GIFT City is a little over $4 billion, which is among the largest in GIFT City. We also have $1 billion of customer deposits... We used to have a relatively small office employing 15-16 people. Today we have 35 people in this (new) office and there is space for 65. The increased space is our expression of our ambition here in GIFT City, which is a rapidly evolving ecosystem,” said Rajiv Anand, Deputy Managing Director, Axis Bank, who visited GIFT City on Wednesday.
Axis Bank’s journey in GIFT City started in 2017 with asset and treasury products that are focussed on corporate customers. In 2019 the bank decided to consolidate its international business in GIFT City. This saw the bank’s existing corporate books getting transferred from foreign centres. The asset size of the bank was $2 billion in 2019.
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“Currently we are seeing a lot of activity in the capital market space, therefore we are enabled to open accounts for capital market players, whether it is for brokers, AIFs, mutual funds etc. We are able to offer custody and fund accounting services... How much we will be able to grow in GIFT City is dependent on two things: What is the funding required by corporate India over next one year and within that what is the foreign currency requirement for corporates,” Anand said regarding the IBU’s growth in GIFT City.
Talking about the profile of borrowers and depositors, the official said, “The $4 billion book will be large Indian corporates, while on the deposit side we have a mix of fintechs, Indian corporates who have dollar-surplus and retail money.” The bank felt that trade financing and capital markets were two areas that will drive the growth in the coming years. “Capital markets space is one area that will grow tremendously in the next five years. The other area is trade finance where one will see a lot of activity in GIFT City. There are other areas like aircraft leasing etc, but it will take time to evolve,” Anand added.