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).
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.
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,
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.
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.
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.
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.
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.
