The Asian Development Bank is looking to invest Rs 1,000 crore into the newly proposed fintech hub at the International Financial Services Centre at GIFT City at Gandhinagar in Gujarat, the Economic Times reported. The global development bank is in conversation with authorities at the GIFT City, a special economic zone for financial services entities, to specifically finance skill development, new technologies and resource mobilisation, the report said citing two unnamed sources. The Asian Development Bank is regional development bank, and has its headquarters in Philippines.
During the Union Budget for 2021-22, Finance Minister Nirmala Sitharaman announced that a Fintech Hub would be set up at GIFT-IFSC. “The government would support the development of a world class Fin-Tech hub at the GIFT-IFSC,” she said. Additionally, Sitharaman also announced tax sops for foreign funds who relocate to the GIFT IFSC. Details on the structure and operations of the proposed Fintech Hub are still awaited.
This move likely to boost fintech funding as investors can register at GIFT-IFSC, receive several tax and other sops, while investing in India’s burgeoning Fintech industry. At the same time, a hub that provides a channel for attracting investments and resources cover financing, operational and technical knwoledge will benefit several startups and fintech companies in the country.
“The tax announcement would help in attracting global players in the Fund business, aircraft leasing & financing business and offshore investment banking sector to set up their base in GIFT IFSC…The Fintech hub will facilitate research, innovation and development of new age skills in fintech which will help in creating new job opportunities and attract quality talent to GIFT City,” said Tapan Ray, managing director and group chief executive officer, GIFT City.
Harshvardhan Lunia, CEO and Co-founder, Lendingkart says that the idea of a FinTech hub has been in the works for several years to increase the flow of investments towards the western state. “This will encourage the spurring of the startups in insure-tech, wealth-tech, agri-tech emerging fields strengthening these industries. The tax holiday being announced to startups will provide impetus to keep innovating to the youth of the nation. This will have a ripple effect leading to adoption of upcoming technological capabilities across the supply chain and the end users benefiting from these measures in the long term,” he said.
Budget Speech 2021-22 | All Statements of Budget Estimates 2021-22