'At GIFT City, we have put in place a green finance ecosystem for Indian corporates': IFSCA chairperson

Kalyanaraman Rajaraman, Chairperson, International Financial Services Centres Authority, on Friday said that their main objective is to build the GIFT City into a sustainable finance platform for Indian corporates so that green financing and the goal towards sustainability are fully achievable. 

Speaking to Sourav Majumdar, Editor, Business Today,  at the BT Banking Summit, Rajaraman said the GIFT City has already established a green finance ecosystem. 

"At COP28, all countries agreed that we need a lot of effort not just at the individual level, regional grouping and other efforts are also needed. There are estimates which say that the world will require something around $125 trillion to achieve the set goal by 2050, which is 2070 for India. In India, we would need something around $10 trillion by 2047. In short, we would need a lot of capital raised, it would require new forms of capital and financial models. All this will need a lot of new policies. At GIFT City, we have put in place a green finance ecosystem. The 26 banks that are present here have been mandated to put up a policy for sustainable financing and green lending. The criteria is that 5% of their portfolio has to be green. The banks have put in a policy and about $70 million is the outstanding green credit lent to Indian corporates," Rajaraman said.

He added: "At GIFT City, we have provided a green bond framework. India doesn't have a taxonomy on this. We are trying to adopt any globally accredited taxonomy, like the ASEAN taxonomy, the Climate Bond framework or any other. With this, we have registered $56 billion worth of bonds, of which $14 billion are either green, social, or sustainable or have sustainable linkage. We have adopted a very active system now," 

He further said: "Our ultimate goal is to build IFSCA into a sustainable finance platform for India.”

“We are putting in place a committee that will look after contributions of GIFT City towards infrastructure,” he concluded.

GIFT-IFSC is a tax-neutral financial centre that aims to compete with hubs like Singapore as it provides fiscal incentives and a looser regulatory environment.

In December last year, PM Narendra Modi too said that his government wants to turn the GIFT City into a global nerve centre of the new age global financial and technology services.

"GIFT IFSC is an efficient channel to make India a low-carbon economy and get the required green capital flow. Issuance of financial instruments such as green bonds, sustainable bonds, and sustainability-linked bonds will help the world," Modi had said.