1. What is GIFT City?
GIFT City is an emerging global financial and IT services hub, a first of its kind in India, designed to be at or above par with globally benchmarked business districts. GIFT City has India’s maiden International Financial Services Centre (IFSC). It offers unique financial opportunities to Resident and Non-Resident Individuals.
The launch of the IFSC at GIFT City is the first step towards bringing financial services transactions relatable to India, back to Indian shores. IFSC unit is treated as a non-resident under extant Foreign Exchange Management regulations.
GIFT City has unified regulator, International Financial Service Centre Authority (IFSCA) having powers of all the regulators in India mainland and separately proving regulatory guidance to the units within GIFT IFSC.
HDFC Bank IFSC Banking Unit (IBU) commenced operation at GIFT City in June 2017. We are one of the premier banks providing banking services to non-resident individuals & corporate. For resident individuals and corporates, we provide services as permitted under FEMA.
2. What are the advantages of GIFT City IFSC?
Below are the advantages of GIFT city compared to other overseas IFSCs:
Unified regulator for regulating banking, capital markets and insurance business in IFSC.
Access to a wide range of financial products – both in India and globally.
Option to transact in 15 varied freely convertible foreign currencies in IFSC.
Nomination facility as same as Indian jurisdiction is allowed in GIFT City.
Being an overseas jurisdiction GIFT City permits offering custody services.
IBU GIFT City provides various investment avenues, denominated in foreign currency.
IFSCA has permitted insurance companies to provide products denominated in FCY.
Various Income tax incentives and lesser tax compliances for Non residents.
1. What products/services we are offering to Non-Resident individuals at HDFC Bank IBU?
Non-Resident Individuals can open call account.
Salient features of call account are as follows:
Call account is offered in all major global currencies. At present account can be opened in USD, GBP, EUR, AUD, CAD, JPY and CHF currencies.
Call account can be maintained with zero balance.
No charges for inward remittance.
Net Banking facility is available.
No interest on balance kept in call account.
Non-Resident Individuals can open savings account.
Salient features of savings account are as follows:
Savings account is to be opened in US dollar.
Average Monthly balance of USD 5000 needs to be maintained.
No charges for inward remittance.
Net Banking facility is available.
Interest rate is 2% p.a., and the interest is paid monthly. Interest rate is subject to change basis prevailing market levels. any change will be solely at the discretion of the bank.
Non-Resident Individuals can book Fixed Deposits.
Client can book deposit in USD, GBP, EUR, AUD, CAD, JPY and CHF currency.
Currently interest rates are being published for 3 major currencies of the world, namely United States Dollar, Great Britain Pound and Euro.
Please click here for the latest interest rates. For deposit in any other foreign currency or in case of preferred rate for a large amount, you can reach out to Treasury (giftcitytreasury@hdfc.bank.in) or GIFT City RM (neelam.sharma@hdfc.bank.in))
What is the minimum amount required for deposits?
For other currencies, please check with branch.
Can customer prematurely withdraw the deposit?
Customers can opt to book the deposit either as withdrawable (can be prematurely withdrawn any time before the maturity) or non-withdrawable (can be withdrawn on or after maturity date).
In case of premature withdrawal, interest rate would be as follows:
| Deposit Tenor | Interest Rate |
|---|---|
| Upto 6 Months | Applicable Rate for Run Tenor less 1% |
| 6 Months to 1 Year | Applicable Rate for Run Tenor less 0.25% |
| Above 1 Year | Applicable Rate Run for Tenor |
Are the deposits of the IBU covered by deposit insurance in India?
Deposit insurance is not being offered to customers for deposit booked at HDFC Bank IBU.
Is nomination facility available to customer?
Nomination facility is available for the customers booking the deposit at GIFT City which is a big advantage. In case anything unforeseen happens to the deposit holder, the identified nominee would receive the balance outstanding in the account as a trustee of legal heirs.
Can Customer opt for automatic renewal of deposit on maturity?
Yes, Customers need not send the maturity instructions each time. The deposit is renewed automatically without any hassle or inconvenience at the then prevailing rates if they opt to do so.
Customer can book deposit for which tenors?
We offer flexible maturity periods with different tenors. FD can be booked from 7days to 5 years tenor based on client’s saving goals and liquidity requirements.
Is there sweep-in facility available?
No, currently there is no sweep-in facility available against deposit.
Is it mandatory to open account to place deposit with HDFC Bank IBU?
No, customer need not to open any account to book deposit with us. However, they must complete KYC process.
Non-Resident Individuals can avail facilities (loan/overdraft) against withdrawable deposits placed at HDFC bank GIFT city or any other location of HDFC Bank.
Non-Resident Individuals can invest in Funds/AIFs and ETFs having investments in entities resident in India or overseas entities.
HDFC bank has a license to distribute capital market products and services.
Client can request IBU for list of mutual funds/AIFs/ETFs, their brochures, NAVs and scheme documents to choose the fund which can meet their investment goals.
Offer of Scheme are subject to bank’s own risk assessment of the customer.
These funds are managed by reputed AMCs like Goldman Sach, Nomura, Pine Bridge, Robeco etc.
These funds differ based on market cap, sustainability, risk profile etc.
We offer investments across Equity, Fixed Income, Mixed allocation and ETF funds. Within equity funds, we offer investments across US, Global, Indian, Thematic, Emerging Market equity and fixed income funds.
Client can invest in lumpsum or can opt for SIPs. Minimum amount and SIP instalments amount will be as per scheme documentation.
Instructions can be provided basis the Investment Application Form.
Management fee/ exit/ entry loads will be charged as outlined in the Fund documents.
Custody fees will be charged by bank over and above fund charges by HDFC bank IBU.
There might be placement fees which will be confirmed by branch RM.
Non-Resident Individuals can book various Over the Counter derivative products. HDFC Bank IBU has range of derivative products such as NDFs, FX options, Swaps etc.
Please note that derivative products offering is subject to client suitability and credit appraisal criteria as prescribed by bank.
Non-Resident Individuals can buy an insurance in foreign currency.
HDFC Bank IBU GIFT City has been granted IIIO license from IFSCA to act as a Corporate Agent to provide insurance products to its customers.
HDFC Bank IBU can offer USD denominated insurance products with better returns and targeted benefits.
We have tied up with multiple insurers to offer variety of insurance products to cater all insurance needs of our clients.
Please note that insurance product offering is subject to client suitability and risk categorization criteria as prescribed by bank.
Currently, customers are being offered below insurance policies issued by HDFC life.
Salient features for USD Global Education Plan:
Client can opt to for a one-time premium payment for insurance policy ranging from 5 to 20 years
Alternatively, client has the option to pay premium of minimum of 3 years and further top up for insurance policy ranging from 5 to 20 years
Policy offers partial withdraw post 3 years; leaving aside one premium rest amount can be withdrawn by the client
Available cover is 1.1times to 20 times the premium amount
Investment Strategies available for Client:
| Strategy Name | Description | Returns since inception* (absolute) | 10 year back tested returns* |
|---|---|---|---|
| Global Equity Index Funds Strategy | Invest in funds that follow a benchmark index and generate returns that are commensurate with the performance of the index | 30.91% | 13.83% |
| Global Diversified Equity Funds Strategy | investments in diversified equities funds. The strategy helps meet long term financial goals like wealth creation, children’s education, etc. | 18.55% | 8.65% |
| Global Fixed Income Funds Strategy | invest in a portfolio of fixed-income fund(s). Investment approach is focused on preservation of capital and income. | 1.04% | -0.07% |
| Global Balanced Funds Strategy | Funds which in turn invest in two or more asset classes, including a mix of low to medium-risk stocks and bonds and provides diversification benefits. | 14.96% | 4.30% |
| Global Gold Funds Strategy | Funds that offer exposure to gold | 23.40% | 6.85% |
| India Focused Funds Strategy | Funds that invest in sectors & companies within the Indian equity market | -7.32% | 9.96% (5 years back tested return) |
| Liquid Funds Strategy | Investment in liquid funds focussing on short-term liquidity | NA | NA |
GIFT City has two international exchanges namely INDIA INX and NSEIX where various overseas securities are listed and are open to invest by individuals.
Non-Resident Individuals can invest in securities and instruments whether issued by entities/companies’ resident in India (outside IFSC) or overseas entities through demat account maintained with us.
Transactions carried out on the stock exchanges in IFSC are exempt from stamp duty and Securities Transaction Tax (STT), reducing the overall cost of investment.
Non-Resident individuals can invest in UDRs listed on NSEIX.
What is UDR? How to Invest in UDRs?
Un-sponsored Depository Receipt (UDR) is an instrument to get exposure to the financial performance of the underlying shares and the benefit of certain rights attached to such underlying shares, without acquiring it directly. UDRs can be bought/sold and kept in demat account.
NSEIX offers 50 US stocks in the form of UDRs which are exclusively quoted on NSEIX exchange and delivers global opportunities for retail Investors. investors can diversify their portfolios and gain offshore exposure to US Equities.
One UDR represents certain fraction of a particular stock and can be traded through demat account.
HDFC Bank IBU offers demat account to its customers through which they can deal in UDRs in US stocks.
For list of US stocks and UDR prices, please refer this link.
2. Can returning Indians whose status changed from Non-Resident to Resident, park their funds in FD or investments at GIFT IBU?
Yes, as per AP Dir 90 dated January 09, 2014 which covers provisions of Section 6 (4) of FEMA 1999, returning Indians (residents who were NRIs earlier) can create FDs or make fresh investments in GIFT IBU provided used funds are out of their income earned outside India and maintained outside India when they were NRIs. Operations team will have to verify this basis documents provided such as account statement and to ensure that LRS funds are not utilized for creation of investments.
Given the physical proximity of GIFT to India mainland, this is an advantage for customers.
3. Who is permitted to invest in an AIF set up in IFSC?
Permissible investors in an AIF are as follows: (a) a person resident outside India; (b) a non-resident Indian
1. Other important points for Non-Resident individuals
1. What features are available through Net Banking for Customers?
Below is the snippet of the features
Self-Registration on NB Platform
View Account and Deposit Summary & Download Account and Deposit Statement.
View Access for Outstanding Loans at contract level
Book Offshore Deposits in USD, GBP & EUR.
Edit FD Maturity Instructions 7 days before maturity
Deposit Transaction Rights based on Mode of Operation for the account
Remittance requests (Drop on the Floor processing)
Self-Account within HDFC Bank Gift City – Up to USD 25,000 equivalent per day limit
Self-Account with Other Bank – Up to USD 5000 (equivalent) in first 24 hours and USD 20,000 (equivalent) thereafter.
This remittance request would be restricted to Self-Account with Other bank. (No Third-Party Remittances would be allowed through Net Banking).
*Equivalent hereby refers to the amount post converting to USD at prevailing exchange rates for transfers initiated in currencies other than USD.
2. Can we carry out rupee denominated domestic transactions from GIFT City?
GIFT City has two Zones: 1. Domestic Tariff Area (DTA) 2. Multiservice Special Economic Zone (SEZ) with International Financial Services Centre.
All the domestic (Rupee-denominated) transactions can only be undertaken from DTA.
3. Is there a local clearing system in GIFT. How does the fund transfer happen between accounts with two different banks
Local clearing system within banks is yet to start. All the remittances are affected as cross border remittances through nostro arrangement and swift instructions.
4. Other Important Links
2. Tax Implications
What are the tax implications for Non-Resident Individuals on various products?
| Income Type | Tax clarification on exemption |
|---|---|
| Interest income on Fixed Deposits | CBDT in its circular no. 26/2016 dated 04th July 2016, in case of non-resident person, no tax will be deducted on interest income on fixed deposit made in GIFT City. Further, such interest income is not liable to income tax in Indian tax jurisdiction. No tax will be deducted from maturity proceeds by HDFC Bank IBU, GIFT City. |
| Offshore or OTC derivatives | Sec 10(4E) offers exemption on any income accrued or arisen to, or received by a non-resident as a result of transfer of non-deliverable forward contracts 62[or offshore derivative instruments or over-the-counter derivatives,] entered into with an offshore banking unit of an International Financial Services Centre |
| Offshore Investment Products | Sec 10(4G) offers exemption on any income received by a non-resident from portfolio of securities or financial products or funds, managed or administered by any portfolio manager on behalf of such non-resident, in an account maintained with an Offshore Banking Unit in any International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, to the extent such income accrues or arises outside India and is not deemed to accrue or arise in India. https://incometaxindia.gov.in/communications/notification/notification-4-2024.pdf |
| Capital gains of AIF's Category III registered in GIFT City | Sec 10 (4D) offers exemption on any income accrued or arisen to, or received by a specified fund as a result of transfer of capital asset referred to in clause (viiab) of section 47, on a recognised stock exchange located in any International Financial Services Centre and where the consideration for such transaction is paid or payable in convertible foreign exchange or as a result of transfer of securities (other than shares in a company resident in India) or any income from securities issued by a non-resident (not being a permanent establishment of a non-resident in India) and where such income otherwise does not accrue or arise in India or any income from a securitisation trust which is chargeable under the head "Profits and gains of business or profession", to the extent such income accrued or arisen to, or is received, is attributable to units held by non-resident |
| Income from investment in Units of AIF | Sec 10 [(23FBC) offers exemption on any income accruing or arising to, or received by, a unit holder from a specified fund or on transfer of units in a specified fund. |
| Insurance Products | GST and Income Tax exemption upon payment of Premium/top-up; maturity / surrender/ partial withdrawal payout; payment upon death of insurer |
Disclaimer: Kindly consult your own tax advisor