Private sector lender, YES Bank on Tuesday announced commencement of operations of its IFSC Banking Unit (IBU) at the country's first International Financial Services Centre (IFSC) coming up at Gujarat International Finance Tec-City (GIFT).
Four more banks, State Bank of India, IDBI Bank, IndusInd Bank and Federal Bank, have received final approval from the Reserve Bank of India (RBI) and are going to commence IBU operations shortly, an official statement said.
So far, more than 15 Financial Institutions have been allocated space in GIFT IFSC.
An IBU allows Indian banks to deliver a complete range of products to its clients with foreign currency funding requirements. IBU can actively offer products such as external commercial borrowings to its customers, an area where it had limited capabilities hitherto.
Also, it will 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.
Ajay Pandey, MD & Group CEO, GIFT Company Ltd said, "Today will be marked as an important day in the history of International Financial Services being operated for the first time in the country from GIFT SEZ-IFSC. This would enable job creation in the financial services at GIFT City."
Commenting on the development, Rana Kapoor, MD & CEO of YES Bank said, "This is a significant development in the overall augmentation of YES Bank’s business model and will help in further diversification and expansion of cross border asset products as well as widen the scope and depth of our liabilities base. The opening of an IBU will also boost YES BANK’s Cross Border Trade offerings, External Commercial Borrowings, Foreign Currency syndications and offshore M&A, funding business additionally."
The IBU will allow YES Bank to raise Foreign Currency funding through MTNs & other routes as appropriate. The bank has appointed Manish Vora as Chief Executive Officer of the IBU.
The IFSC at GIFT has seen increased attraction from the BFSI sector in India, especially from banks, insurance companies and other financial services players who want to tap the global markets.