India needs offshore financial centers | Daily News

India needs offshore financial centers

D P Kanungo, Deputy Governor Reserve Bank of India, said “Rupee denominated bonds, the so-called masala bonds, have also found investor appetite in off-shore markets. When Rupee assets are widely held by global investors, there will be (a) need for rupee derivatives to hedge currency, interest rate, and credit risks. It is therefore natural that there will be a need for such markets in offshore financial centers.”

Kanungo was delivering the keynote address at the Foreign Exchange Dealers Association of India (FEDAI) Annual Conference in Beijing on 19 April.

Kanungo added, “while the on-shore derivatives market is tightly regulated, offshore markets are beyond regulatory reach.”

Kanungo said “China is the world’s largest economy today on PPP basis and India is the third largest. If you add the exports and imports, China is India’s largest trading partner (2017–18 data). Among the fastest growing economies, the engagement between the two countries can be expected to see phenomenal growth in the times to come.”

According to media reports provided by the CHEC Port City Colombo website draft legislation separating the port city from local law is set to be presented in mid-May. The new laws would stipulate the role and supervision of the Central Bank of Sri Lanka in the Port City.

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