Mumbai moves up in global financial centre ranking

Panama, Bahrain and Johannesburg, meanwhile, were the major losers. GFCI-19 provides profiles, rating and rankings for 86 financial centres, drawing on two separate sources of data — instrumental factors (external indices) and responses to an online survey.

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Mumbai is the only Indian city that figures in the global list of financial centres. While New Delhi, Kolkata and Bengaluru are nowhere in the picture, the GFCI survey is yet to take note of Gujarat International Finance Tec-City (GIFT) — claimed to be India’s first International Financial Services Centre (IFSC) — near Ahmedabad. GIFT City claims that it has crossed the $ 250 million business transactions mark in six months.

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The first mark of $100 million was crossed in early February and in two months, business transactions at IFSC have more than doubled, it said.

According to the GFCI survey, there are 13 cities in Asia which are ahead of Mumbai in the GFC ranking. Singapore is in the third position in the global ranking followed by Hong Kong (4th). London tops the list followed by New York in the second position.

Many Asian cities have stolen a march over Mumbai as global financial centres. Tokyo is in the fifth position, followed by Seoul (12th), Dubai (13th), Shenzhen (19th), Osaka (20th), Beijing (23rd), Taipei (24th), Tel Aviv (25th), Abu Dhabi (26th), Doha (35th) and Kuala Lumpur (36th). Gulf cities have showed a major improvement in becoming financial centres in the past 15 years.

Though the government made some efforts in taking Mumbai to the top of the league, nothing much has moved at the ground level. India is yet to allow full convertibility on the capital account and the city is yet to get the required infrastructure support to become a global centre on the lines of Singapore or London.

The report prepared by a committee headed by UK-based Percy Mistry, appointed by former finance minister
P Chidambaram in 2005 to work on a blueprint for a global financial centre in Mumbai which could compete with London, New York and Singapore, is gathering dust. Mistry had said Mumbai needed a suitable location to be developed as a financial centre.

“You can consider places like the Bandra-Kurla Complex (BKC). You need more office space and facilities in BKC.
You have to house banks, law firms, accountants etc in the IFC locality. Look at Manhattan in New York. Though New York is a big city, almost the entire IFS business is done in Manhattan, a small area, which houses all kinds of banks and other allied services,” Mistry had told this paper in an earlier interview.

According to the Mistry report, in the first phase, Mumbai must connect India’s financial system with the world’s financial markets through international financial services. That is what global cities like Frankfurt, Paris, Sydney, Tokyo and a host of smaller financial centres do now in respect of their national economies.

In its second phase, Mumbai must develop the capacity to compete with the three established GFCs for global financial services business that goes beyond meeting India’s needs. After 2020, the committee said, Mumbai would hold its own in competing with the other GFCs and acquire increasing global market share.

Going by the current pace of Mumbai’s development, this is likely to remain a chimera.