Sumitomo Mitsui Banking Corporation (SMBC) has obtained approval to open a branch in the Gujarat International Finance Tec-City (GIFT City) from the International Financial Services Centres Authority in India and the Financial Services Agency in Japan.

GIFT City is a national project to implement India’s first smart city including a financial offshore special economic zone in the state of Gujarat, western India, which is in line with the government’s vision of making the country an international financial hub.

To foster a favourable environment for increased trade and economic growth, the Indian government has introduced tax incentives, such as a zero withholding tax which in principle is applied to the offshore-foreign currency-denominated borrowing from outside India.

As regulations in principle prohibit extending foreign-currency loans in India, offshore borrowing has been well utilized. GIFT City presents an opportunity for SMBC to manage offshore business linked to India from within the country, enabling the bank to cater to the diverse and growing needs of its clients.

SMBC entered India in March 2013, establishing its first branch in New Delhi. The Mumbai and Chennai branches opened in March 2017 and November 2020, respectively, to provide financial services to its customers.

With the new GIFT City branch focusing on the FX lending business, SMBC says it will further strengthen its capabilities and capacity to service its clients in the country.

Preparations are underway for the bank’s GIFT City branch to open in the first half of 2024.