Leading Banks set up GIFT City play buy stakes in CCIL IFSC

OVERVIEW:

• ##### In a strategic move to expand its foothold within the Gujarat International Finance Tec City (GIFT City), the State Bank of India (SBI) has finalized the acquisition of a 6.125% stake in Clearing Corporation of India-IFSC Limited (CCIL IFSC).

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• ##### Additionally, British lenders HSBC and Standard Chartered have acquired stakes in the CCIL-IFSC, which is the proposed entity to operate a real-time foreign currency settlement system at GIFT City.

STAKE ACQUISITION:

• ##### SBI has executed transaction documents to acquire 6.125% stake in CCIL IFSC Limited, translating to 61.25 lakh equity shares at ₹10 each.

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• ##### HSBC executed transaction documents on May 17 for the acquisition of a 6.125% stake in the CCIL IFSC, translating to 6.125 million equity shares at ₹10 each,

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• ##### Standard Chartered Bank is also picking up a 6.125% stake in the CCIL IFSC.

STRATEGIC IMPLICATIONS:

• ##### CCIL IFSC will serve as a crucial entity operating the foreign currency settlement system and functioning as a clearing house and system operator within the IFSC at GIFT City.

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• ##### CCIL IFSC, with an authorized and paid-up capital of ₹200 crore and ₹100 crore respectively, signifies a robust financial framework to support its operations.

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• ##### The Clearing Corporation of India Ltd (CCIL) is spearheading CCIL IFSC, retaining a majority stake of 57.125% in the newly established entity.

TIMELINE AND COMPLETION:

• ##### The indicative timeline for the completion of the transaction is set at up to six months from the date of execution of transaction documents.

CONCLUSION:

• ##### The recent entry of key players such as HSBC, Standard Chartered, and State Bank of India (SBI) into Gujarat International Finance Tec (GIFT) City marks a significant milestone in the development of GIFT City's financial ecosystem.

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• ##### These institutions have acquired stakes in CCIL IFSC, highlighting their commitment to expanding their presence in India and leveraging the opportunities offered by GIFT City.

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• ##### With CCIL IFSC capitalised and poised to play a crucial role in operating the Foreign Currency Settlement System (FCSS) and serving as a clearing house within GIFT City, these collective endeavours aim to reinforce India's stature as a global financial hub, particularly within the IFSC framework at GIFT City.