Uday Kotak Appointed as GIFT City Chairman

Uday Kotak Appointed as GIFT City Chairman

Why in News? 

Veteran banker Uday Kotak has been appointed as the Chairman of Gujarat International Finance Tec-City (GIFT City) by the Gujarat government, replacing Hasmukh Adhia. 

Who is Uday Kotak?

• Introduction: Uday Suresh Kotak (born 15 March 1959, Mumbai) is a globally recognised Indian banker, entrepreneur, and the Founder of Kotak Mahindra Bank. He is currently serving as a Non-Executive Director after stepping down as MD & CEO in September 2023. 

• Early Life: Born into a Gujarati Lohana business family engaged in cotton trading, Kotak grew up in a joint family of nearly 60 members, which shaped his early understanding of finance and entrepreneurship. 

• Education: He completed his B.Com from Sydenham College and later pursued a Master’s in Management Studies (MMS) from Jamnalal Bajaj Institute of Management Studies, University of Mumbai (1982). 

• Entrepreneurial Journey: In 1985, He started Kotak Mahindra Finance Ltd. as NBFC with a seed capital of less than US$80,000 borrowed from family and friends. Beginning with a bill-discounting business, he expanded into stockbroking, investment banking, insurance, car finance, and mutual funds.

• Banking Revolution: In 2003, his NBFC became the first Non-Banking Financial Company in India to receive a banking licence from the RBI, transforming into Kotak Mahindra Bank. Today, the institution manages assets exceeding US$68 billion and has grown into one of India’s largest private-sector banks by market capitalisation. 

• Global Recognition: Kotak is widely known as India’s richest banker, with an estimated net worth of around US$14–15 billion (₹1.2 lakh crore approx.) as of 2025. He consistently features in Forbes’ list of India’s richest individuals and global billionaire rankings due to his dominant stake in Kotak Mahindra Bank. 

• Policy Contributions: He has played key roles in national financial governance, including membership in the Government of India’s High-Level Committee on Financing Infrastructure, advisory roles with SEBI, and leadership positions in the Confederation of Indian Industry (CII). He also chaired IL&FS during its financial crisis to stabilise the system.

• Awards: Kotak received several prestigious recognitions such as Ernst & Young World Entrepreneur of the Year (2014) and was honoured with the Padma Bhushan in 2026 for his contributions to trade and industry in India’s financial sector. 

Significance of his Appointment

• Shift Towards Private-Sector Governance: His appointment marks a major institutional transition from bureaucratic leadership to industry-led governance, replacing former Finance Secretary Hasmukh Adhia. This reflects India’s intent to bring market-based expertise into strategic financial infrastructure management, which experts believe may improve operational efficiency and global competitiveness of IFSC frameworks. 
• Acceleration of India’s Global Financial Hub Ambition: GIFT City was conceptualised to compete with established global financial centres like Singapore and Dubai. Appointing a globally experienced banker signals a policy push to strengthen international credibility, enhance capital inflows, and promote cross-border financial services.
• Strengthening Global Investor Confidence: Kotak’s leadership is expected to enhance foreign institutional investor (FII) confidence due to his long-standing experience in asset management, insurance, and alternative investments. This may encourage multinational financial firms to expand operations within IFSC Banking Units (IBUs), especially as GIFT City already hosts over 35 banking units.
• Policy Continuity with Enhanced Reform Orientation: The appointment comes at a time when the Government of India has extended tax holidays for IFSC-based firms from 10 to 20 years, signalling long-term commitment to making GIFT City a global financial destination. Industry-led oversight is expected to facilitate better utilisation of such fiscal incentives for fund relocation.
• Integration with Global Financial Networks: With GIFT City ranked 46th in the Global Financial Centres Index (2025) and improving in fintech reputation rankings, leadership from a global banking professional may support deeper integration with international capital markets, fintech ecosystems, and institutional investors, enhancing India’s financial diplomacy and regulatory parity.

What is GIFT City?

• • About: Gujarat International Finance Tec-City (GIFT City) is India’s first operational Greenfield Smart City and the country’s only International Financial Services Centre (IFSC) developed to provide global-standard financial services within India.
  • Vision and Economic Significance: The primary objective of GIFT City is to make India a global financial services hub by offering tax incentives, ease of doing business, unified regulation, and world-class infrastructure. 
  • Location and Infrastructure: GIFT City is strategically located between Ahmedabad and Gandhinagar on the banks of the Sabarmati River, and spans approximately 886 acres of planned urban infrastructure. The city integrates commercial, residential, and social facilities with a “walk-to-work” concept to support financial professionals and institutions.

• Regulatory Body: The GIFT City is regulated by the International Financial Services Centres Authority (IFSCA), established under the International Financial Services Centres Authority Act, 2019. It acts as a unified regulator for all financial management. 

• Incentives: Key incentives include 100% tax exemption on business income for any 10 consecutive years out of 15, no Securities Transaction Tax (STT), no Commodity Transaction Tax (CTT), and GST exemptions on select financial services.

• Special Economic and Financial Structure: The city operates under a dual-zone model consisting of a Domestic Tariff Area (DTA) and a Special Economic Zone (SEZ). The SEZ houses India’s first IFSC, which enables institutions to conduct cross-border financial services in foreign currencies.
• Core Financial Services Ecosystem: GIFT City provides a wide range of international financial services including offshore banking, capital markets, asset management, insurance, global treasury services, fintech operations, and aircraft leasing. Transactions within IFSC units are conducted in foreign currencies instead of Indian Rupees.
• Global Investment and Institutional Presence: As of 2025, GIFT City hosts over 900 registered financial entities, including global banks, insurance firms, investment funds, and more than 100 foreign companies, with banking assets nearing US$100 billion.

Features of Gujarat International Finance Tec-City (GIFT City)

• India’s First Utility Tunnel Infrastructure: GIFT City has developed India’s first integrated underground Utility Tunnel, which houses power cables, water pipelines, telecom networks, treated sewage lines, and cooling pipelines in a single corridor. This enables a “digging-free city” model, ensuring uninterrupted services.
• Smart Command & Control Centre (C-4): The city operates through an IoT-enabled City Command and Control Centre (C-4) that provides real-time monitoring of power, water supply, district cooling, waste systems, and emergency services. This ensures 24×7 surveillance, predictive infrastructure management, and rapid incident response.
• Tier-IV Green Data Centre: GIFT City hosts a state-of-the-art TIER-IV certified Green Data Centre with a capacity of around 900 server racks, ensuring high uptime, data security, and seamless digital financial transactions for international banking and capital market operations within IFSC jurisdiction.
• Fault-Tolerant ICT Connectivity: The city is connected through a fault-tolerant optical fibre ring network, supported by multiple telecom service providers. This provides high-speed FTTP broadband connectivity, enabling global trading platforms, fintech firms, and offshore banking units to conduct real-time international financial transactions without latency disruptions.
• Near Zero-Discharge Water System: GIFT City follows a Zero-Liquid Discharge (ZLD) model, where wastewater is treated and reused for district cooling, landscaping, and sanitation purposes. It ensures 24×7 potable water supply meeting WHO standards, reducing dependence on freshwater resources and promoting sustainable urban infrastructure.