Mashreq Bank becomes the first UAE-based bank to receive IFSCA approval for setting up a branch in GIFT City, marking a major milestone in India-UAE financial cooperation.
Mashreq Becomes the First UAE Bank to Enter GIFT City
Introduction
Mashreq Bank, a prominent financial institution from the United Arab Emirates (UAE), has secured in-principle approval from the International Financial Services Centres Authority (IFSCA) to establish an International Banking Unit (IBU) in India’s Gujarat International Finance Tec‑City (GIFT City). This makes Mashreq the first UAE-based bank to gain such authorization, marking a historic milestone in India-UAE banking ties
Approval and Timeline
The IFSCA has granted Mashreq the initial go-ahead, with the bank already obtaining clearance from UAE’s Central Bank and GIFT City SEZ authorities. The full license is now in progress, with operations expected to commence by Q4 2025, contingent upon final regulatory approvals
Strategic Services to Be Offered
Once operational, Mashreq’s GIFT City IBU will focus on wholesale banking, including foreign currency lending, trade finance, treasury services, and risk management solutions—tailored to facilitate seamless cross-border transactions
Advantages for Clients
Operating within GIFT City allows Mashreq to serve clients in a favorable single-time-zone environment, enhancing turnaround times for transactions involving the Middle East. Additionally, initial tax incentives, such as exemptions from Tax Deducted at Source (TDS), will enable the bank to offer competitive financial solutions
Impact on India–UAE Finance Corridor
Mashreq’s entry into GIFT City reinforces the economic corridor between India and the UAE. The move is in sync with both nations’ broader goals of expanding bilateral trade, investment, and financial collaboration—especially under the India–UAE CEPA framework .
Why This News Is Important
Strengthening India’s Financial Hub Vision
GIFT City is India’s flagship international financial services centre, designed to rival global centers like Singapore and Dubai. Mashreq’s entry underscores global investor confidence in India’s regulatory and infrastructural reforms, aiding the ”Viksit Bharat @2047” vision to transform India into a developed economy.
Boost to Global Banking Integration
As the first UAE bank to enter GIFT City, Mashreq sets a precedent for regional and global banks to follow. Their presence is expected to enhance foreign capital inflows, deepen cross-border banking, and spark innovation in trade financing and treasury services.
Competitive Financial Services Ecosystem
Mashreq’s IBU will offer a suite of advanced financial services—including foreign currency lending and risk management—under a regulatory regime with tax benefits. This can lead to better pricing, improved liquidity, and a more diverse financial services landscape for Indian and global businesses.
Historical Context
Emergence of GIFT City
Established in 2011, GIFT City was envisioned as India’s answer to international financial hubs. It offers a world-class business environment through Single Window Clearance, customized regulations, and financial incentives under the SEZ framework.
IFSCA’s Boost to International Banking
Since its inception in 2020, the IFSCA has actively permitted global banks and financial institutions to set up IBUs in GIFT City. French banks Natixis and Crédit Agricole had previously received in-principle nods, and more applicants—including Societe Générale and First Abu Dhabi Bank—are in the pipeline
India–UAE Economic Partnership
The India–UAE Comprehensive Economic Partnership Agreement (CEPA), signed in 2022, has enhanced trade and investment flows. Financial services form a core part of this cooperation, enabling streamlined banking operations between the nations—exemplified now by Mashreq’s move.
Key Takeaways from Mashreq’s GIFT City Entry
| # | Key takeaway |
|---|---|
| 1 | Mashreq is the first UAE-based bank to receive in-principle approval to set up an IBU in GIFT City. |
| 2 | The bank has obtained permits from UAE Central Bank and GIFT City SEZ and is awaiting full IFSCA license. |
| 3 | The IBU will provide foreign currency loans, trade finance, treasury, and risk management services. |
| 4 | GIFT City offers tax incentives (like TDS exemptions) and time-zone convenience for Middle East deals. |
| 5 | This move deepens the India‑UAE economic corridor, supported by CEPA and India’s global financial positioning. |
FAQs: Frequently Asked Questions
1. What is Mashreq Bank?
Mashreq is one of the oldest and most prestigious private banks in the United Arab Emirates, offering innovative banking and financial services across retail, corporate, and digital banking sectors.
2. What is GIFT City in India?
GIFT City (Gujarat International Finance Tec-City) is India’s first operational smart city and International Financial Services Centre (IFSC), aimed at positioning India as a global hub for financial services.
3. What is the IFSCA?
The International Financial Services Centres Authority (IFSCA) is the unified regulator for financial institutions operating in GIFT City. It grants licenses and oversees financial activities in the IFSC.
4. Why is Mashreq’s entry into GIFT City significant?
It marks the first time a UAE-based bank has entered India’s international financial zone, strengthening cross-border finance and trade relations between India and the UAE.
5. What are the benefits of operating in GIFT City?
Institutions in GIFT City enjoy tax exemptions (like no TDS), a streamlined regulatory environment, and proximity to international time zones, especially the Middle East and Southeast Asia.
6. What kind of services will Mashreq offer from GIFT City?
Mashreq’s International Banking Unit (IBU) will offer foreign currency lending, trade finance, treasury solutions, and risk management tools tailored for global and Indian clients.
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