Japan’s MUFG Bank on May 26 announced that it has become the first Japanese bank to obtain approval to open a branch (GIFT Branch) in the Gujarat International Financial Tec-City (GIFT City) from the International Financial Services Centre Authority in idnia and Financial Services Agency in Japan. T
GIFT City in Gujarat is a financial and IT special zone with an international financial services centre for offshore transactions. The GIFT City encourages banks and investors to return business currently overseas to India. The government has rolled out tax incentives like a zero withholding tax and a 10 year corporate tax holiday, which have led many foreign financial institutions to open offices in GIFT City.
Tapan Ray, MD & Group CEO, GIFT City, said, “The announcement of MUFG Bank becoming the first Japanese bank to open a branch in GIFT City is indeed a positive one. With this important addition, the international banking ecosystem in GIFT City will further strengthen, showcasing the rising significance of GIFT IFSC. We are confident that other Japanese financial institutions would also consider marking their presence in GIFT City.”
The GIFT City in a statement said, “In India, regulations in principle prohibit extending foreign currency-denominated loans, but GIFT City provides an opportunity to book India-linked offshore business within India which we believe will enable us to meet diverse funding needs of customers in a market where future growth is expected. In addition, foreign currency lending operations, hitherto mainly conducted from outside India, can now be processed within the country. This, together with an expected simplification of procedures, will improve diversity and mobility in financing in India, enabling clients to benefit from improved financial services.”
MUFG Bank said it strives to provide financial services to its clients in India, doing so ever since the establishment of the current Mumbai branch in 1953. It added, that in March 2022, it announced the establishment of the MUFG Ganesha Fund,, an investment fund totaling $300 million for startups in India with the aim of further contributing to the development of clients operating in India and of India itself.
Presently, MUFG Bank has five branches in India (New Delhi, Mumbai, Chennai, Bengaluru and Neemrana), making the GIFT Branch our sixth branch. We will make the most of this network, the largest of any Japanese bank in India, and work to provide even more extensive enriched financial services so as to live up to clients’ needs better than ever before, the bank added.