JPMorgan Chase & Co has established a derivatives development unit in the GIFT City, or Gujarat International Finance Tec-City, in India, which marks a big step for the bank as this will be the first global bank to do so in the country. According to the sources close to the issue, derivative offerings for clients across the Asia-Pacific and European regions will be created and marketed and operational support will be provided for the products developed in the financial hub.
With the inclusion of GIFT City in its portfolio of quality product development and service centers, the bank is expected to strengthen its already existing business platforms in key financial cities such as Hong Kong and London. The bank will add five professionals over the next year to head the initiative that will further enhance the bank’s footprint in India’s rapidly emerging financial services sector.
This aligns with the strategy of New Delhi on GIFT City, as a potential global trading hub competitive enough to possibly offer financial services in the likeness of Singapore and Dubai. Setup of JPMorgan‘s unit in GIFT City marks a turning point for the hub; proving not only that it is capable of focusing on financial services centered on India, but also on global financial activity.
JPMorgan did not respond to requests for comment. International Financial Services Centers Authority, which regulates GIFT City, was not accessible at the time of press for comment.
The move comes amid growing interest from other international banks in GIFT City. The institutions involved are HSBC, BNP Paribas, and Sumitomo Mitsui Banking Corporation, among others. These ventures opened branches at the financial center as a means of exploiting the potential of offering derivatives trading and acquisition financing, which are prohibited from other areas in India. JPMorgan had actually rolled out its global business division into GIFT City a year ago, leveraging on the fact that it was exempted from some regulations that would bar foreign banks from conducting certain functions without reflecting their net position on the balance sheet.
This strategic expansion of JPMorgan’s nationwide contribution well depicts the intention of the company to further strengthen its presence in the region and seize opportunities within GIFT City while positioned as a global player in financial markets.
