REC gets RBI approval to establish subsidiary in Gujarat’s GIFT city

The ‘No Objection Certificate’ from the RBI, dated May 3, 2024, paves the way for REC to establish a presence in GIFT City, a burgeoning hub for financial services in India.

REC Limited, a leading Maharatna Central Public Sector Enterprise under the Ministry of Power, has received the Reserve Bank of India’s (RBI) approval to set up a wholly-owned subsidiary in the International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT City), Gandhinagar.

The ‘No Objection Certificate’ from the RBI, dated May 3, 2024, paves the way for REC to establish a presence in GIFT City, a burgeoning hub for financial services in India. The proposed subsidiary will engage in a range of financial activities, including lending, investment, and other financial services, operating as a finance company within the IFSC.

This strategic decision aligns with REC’s overarching goal of exploring new avenues for growth and expanding its footprint in the global market. GIFT City’s conducive environment for international lending activities, coupled with its world-class infrastructure, presents an attractive opportunity for REC to carve a niche for itself in the global financial landscape.

Vivek Kumar Dewangan, Chairman and Managing Director of REC Limited, expressed confidence in the subsidiary’s potential to contribute significantly to the growth of India’s energy sector. “The GIFT City platform offers a conducive environment for international lending activities, coupled with world-class infrastructure,” he said. “We are confident that REC will harness these advantages to carve a niche for itself in the global market.”

Dewangan further emphasized REC’s commitment to fostering growth in India’s power and infrastructure sectors while expanding its global footprint. “The entity at GIFT City will not only present new business opportunities for REC but will also contribute significantly to the growth of the country’s energy sector,” he added. “We look forward to leveraging this strategic move to further propel REC’s mission of fostering growth in India’s power and infra sector while expanding our footprint on the global stage.”

What is GIFT City?

Gujarat International Finance Tec-City, commonly known as GIFT City, is an ambitious central business district project under development in the Ahmedabad district of Gujarat, India. Envisioned as India’s first operational greenfield smart city and international financial services centre, GIFT City is a flagship initiative promoted by the Government of Gujarat as a greenfield project.

In 2020, GIFT City’s International Financial Services Centre (IFSC) achieved a remarkable milestone by securing the 10th position in the Finance Industry and emerging as the top-ranked emerging financial centre in the prestigious Global Financial Centres Index.

As of June 2023, GIFT City has emerged as a thriving hub, attracting 23 multinational banks, including global giants like HSBC, JPMorgan Chase, and Barclays. This international finance centre has also become home to 35 fintech entities, further solidifying its position as a hub for innovation and technological advancements in the financial sector.

One of the standout features of GIFT City is the presence of two international stock exchanges, which have recorded an impressive average daily trading volume of $30.6 billion, highlighting the city’s growing significance in the global financial markets.

Additionally, GIFT City boasts India’s first international bullion exchange, an achievement that underscores the city’s commitment to diversifying its financial offerings. This bullion exchange has already onboarded 75 jewellers, laying the foundation for a robust ecosystem catering to the precious metals trade.

With its state-of-the-art infrastructure, business-friendly policies, and strategic location, GIFT City is poised to become a major player in the global financial services landscape. As the city continues to attract international investment and talent, it is expected to play a pivotal role in India’s quest to establish itself as a leading financial hub on the world stage.

The establishment of the subsidiary in GIFT City is a testament to REC’s proactive approach to exploring innovative avenues for growth and its commitment to supporting the nation’s energy and infrastructure development goals. As a leading player in the power sector, REC’s expansion into the global financial services arena is expected to yield significant benefits for the company and the broader energy ecosystem.