JPMorgan in Talks With 100 Multinationals for India Finance Hub

(Bloomberg) — More than 100 companies have tapped JPMorgan Chase & Co. to explore banking and payments solutions for corporate treasury operations in India’s GIFT City over the next 12 to 18 months; This underlined the increasing interest of multinational companies in the country’s financial centre.

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

He said insurance companies and fintech companies were among the customers who applied to the Wall Street bank.

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

Banking assets at Modi’s home base have doubled to more than $100 billion as of September compared to two years ago. The interest is driven by incentives, including a 20-year tax holiday that came into force in April.

There are currently 10 operating corporate treasury centers in GIFT City. These include AMNS Global Treasury Center IFSC and Amefird Treasury, according to regulator International Financial Services Centers Authority.

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

“There is significant internal evaluation going on within companies, especially among multinationals,” Rajagopal said.

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

Rajagopal said JPMorgan offers services such as physical pooling, cash concentration and notional pooling. Physical pooling combines cash balances from subsidiaries into a central account; Notional pooling, on the other hand, balances balances in multiple accounts without physically moving the funds.

“Companies around the world are looking to optimize their borrowing costs and distribute excess cash efficiently, especially when commodity prices remain volatile,” the chief executive said.