Axis Bank consolidated its international business, including corporate and financial institution loan assets at Gift City unit.
| Photo Credit:
Elke Scholiers

Large Indian lenders are increasingly turning towards Gujarat’s Gift City to tap overseas clients banking needs, senior bankers say, with some banks even choosing to shut some of their foreign country branches due to scalability and viability issue.

“We are in the process of shutting down Axis UK. We had a small business there and took a strategic call couple of years back that growth in that business is limited, cost are quite high,” said Axis Bank MD Amitabh Chaudhry.

“We had set it up with intention to deal with Indian companies’ overseas operations, but due to our sovereign rating there were limitations on what we could do. Most of the capital has been repatriated. We can do lot of international operations from Gift City itself. We have among the largest operations in GIFT City,” he said.

Business potential

Axis has consolidated its international business, including corporate and financial institution loan assets, at Gift City IFSC Banking Unit (IBU). The lender has developed a strategic unit focusing on trade finance, corporate banking, treasury, retail and capital markets business segments. In FY25, the lender secured an aircraft financing transaction via Gift City branch, and executed India’s first Blue loan – $500 million mandate from IFC – to finance green and blue assets through Gift City IBU.

“As on March 31, 2025, the total assets of our GIFT City IBU stood at 2.1 per cent of the bank’s total assets. Gift City assets constitute over 50 per cent of overseas assets held across all overseas branches of the bank,” the MD said.

Bank of Baroda, meanwhile, treats its Gift City branch as an offshore banking unit and has chosen it as a centre for driving business growth, taking into consideration the immense business potential, tax advantage and government initiatives. The lender’s Gift City unit has “state of the art” dealing room for international treasury orations of global standard, it said in FY25 annual report.

“As on March 31, 2025, IFSC branch’s total deposits (net of Overdraft and Loan against Bank’s own deposits) are ₹41,014.22 crore, borrowings are ₹8,573.45 crore and outside liabilities are ₹832.35 crore (i.e. total liabilities of ₹50,420.02 crore). The net worth of the branch as on Mar 31, 2025 is ₹3,910.21 crore. IFSCBU is treated as overseas branch of Bank of Baroda and assets and liabilities of the overseas branch are reflected in bank’s stand-alone balance sheet,” the report said.

Earlier this month, Mashreq Bank India received an In-Principle Approval (IPA) to open a new unit in Gift City. Premises for the unit have been identified and recruitment for key roles are underway. The Gift City branch will offer a suite of services, including foreign currency loans, trade finance solutions and treasury and risk management products.

“With its proximity to Indian clients and the benefits of operating within a single time zone, the Gift City branch will offer enhanced convenience and faster turnaround for customers. Additionally, regulatory incentives such as Tax Deducted at Source (TDS) exemptions in the initial years will support competitive structuring of financial solutions,” the lender said in a statement.

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Published on July 13, 2025