New Delhi: Industry chamber Assocham on Tuesday urged establishment of a Global Family Office Hub and a globally competitive Corporate Treasury Centre framework both in GIFT City to strengthen Indian Rupee.
A dedicated policy and regulatory framework is required to attract global family offices, which collectively manage several trillion dollars in assets, to establish investment, treasury, and wealth management structures within GIFT City, the industry body said in a submission to the government and the central bank.
Global family offices in GIFT City would generate substantial and sustained capital inflows, deepen India’s financial markets, and contribute directly to the structural strengthening of the Indian Rupee and its foreign exchange reserves.
Further, a globally competitive Corporate Treasury Centre framework within GIFT City can attract the treasury, cash pooling, foreign exchange management, and trade finance operations of multinational corporations.
These activities are currently managed predominantly from Singapore, Dubai, London, and Hong Kong.
“We urge the Government to give GIFT City the competitive framework it deserves, benchmarked against the world’s best international financial centres, ” said Nirmal K. Minda, ASSOCHAM President.
A single regulatory gap prevents wider rupee trade settlement– the absence of an explicit provision allowing cross country fungibility of INR Vostro Account balances, which leads authorised dealer banks to default to dollar settlement.
Reserve Bank of India should issue a circular stating INR balances accumulated in Special Rupee Vostro Accounts may be freely utilised to settle payment obligations arising from Indian export or import transactions, subject to applicable KYC, AML, and documentation requirements, the industry body said.
Minda added that it is time to realise Prime Minister Narendra Modi’s vision that India must conduct its international trade in Indian Rupees, to the greatest possible extent.
“The geopolitical conditions are uniquely favourable. India’s trading partners across BRICS, West Asia, ASEAN, and Africa are actively seeking alternatives to the dollar, and the Indian Rupee is the most credible alternative available,” the industry body said.
(IANS)
