Over 100 multinationals eyeing treasury operations in GIFT City: JPMorgan

More than 100 companies have approached JPMorgan to explore banking and payment solutions for treasury operations in GIFT City, reflecting rising multinational interest in India's financial hub

By Saikat Das and Siddhi Nayak

 

More than 100 companies have approached JPMorgan Chase & Co. to explore banking and payment solutions for corporate treasury operations in India’s GIFT City over the next 12 to 18 months, highlighting growing interest from multinational firms in the country’s financial hub. 

“We haven’t seen anything like this before,” Guhaprasath Rajagopal, managing director and head of payments at JPMorgan India, said in an interview. “Treasury centers are a major theme for GIFT City, and the ability to offer foreign-currency accounts alongside rupee capabilities provides an additional tailwind.”

 

Clients approaching the Wall Street bank also include insurance companies and fintech firms, he said.

   

The Gujarat International Finance Tec-City, known as GIFT City, is an initiative of Prime Minister Narendra Modi to position it as a global financial hub to rival Dubai or Hong Kong. The zone offers exemptions from certain taxes and regulatory restrictions, making it more attractive for international capital raising.

 

Banking assets in the hub based in Modi’s home state doubled to more than $100 billion as of September compared with two years earlier. The interest is being driven by incentives, including a 20-year tax holiday that came into effect in April.

 

There are 10 corporate treasury centers already operational in GIFT City. Those include AMNS Global Treasury Centre IFSC and Amefird Treasury, according to the International Financial Services Centres Authority, the regulator. 

 

The next wave is expected to be dominated by multinational companies. 

 

“Significant internal evaluation is underway at corporates, particularly among multinational firms,” said Rajagopal. 

 

The expansion is creating opportunities for banks to provide liquidity-management services, an increasingly important business as global companies seek to centralize cash and funding operations.

 

JPMorgan offers services including physical pooling, cash concentration and notional pooling, Rajagopal said. Physical pooling consolidates cash balances from subsidiaries into a central account, while notional pooling offsets balances across multiple accounts without physically moving funds.

 

“Companies across the world want to optimize borrowing costs and deploy surplus cash efficiently, particularly when commodity prices remain volatile,” said the managing director.