International fin cities: Govt to discuss plan with RBI, FM

To compete with global financial cities like Hong Kong, Dubai and Singapore, the Modi government is planning to notify rules for International financial cities, as promised by the Finance Minister in his Budget speech, by April 1. The first such hub will be the Rs 74,000 crore gift city in Gandhinagar, which was first conceived by Modi as Gujarat Chief Minister. A slew of high level meetings are slated on March 22 and 23 to decide the final contours of gift city and other such financial centers.

A part of the agenda for the meeting of the Finance Minister with regulators Sebi and RBI has to do with the International Financial Centre first announced in the Budget speech.

Government sources indicate that for this concept to be successful, for it to actually attract global capital, the government will have to walk the talk in the form of making the regulations at par which is globally accepted like exemption from Foreign Exchange Management Act (FEMA) regulation.

If one will have a FEMA not applicable in International Financial Centre like the Gujarat International Finance Tec (GIFT) city, it indicates proper safe guards must be in place to ensure there is no flight of capital.