Mumbai gets one step closer to become Internal Financial Centre

A study by MasterCard has placed Mumbai at the 10th place in the financial flows hub list. Among the top ten there are 5 European, 2 American and 2 other Asian cities. Surprisingly, none of the Chinese cities figure in the top 10 list.

The financial flow dimension is decided by giving equal weightage to financial services network, equity transactions, bond transactions, derivatives contracts traded and commodities contracts traded. Mumbai scores on high equity trading volumes and good presence of global banking and financial services firms.

The full study was done on 6 aspects – legal and political framework, economic stability, ease of doing business, financial flow, business centre and knowledge creation and information flow. Mumbai scored well on financial flow aspect but in terms of performance as overall centres of commerce, Mumbai ranks at 45th position, behind Shanghai and Hong Kong.

Mumbai has set a target of 2020 to evolute from a financial hub to an International Financial Centre. But it has quite a lot distance to cover. It would require upgradation of existing infrastructure, improved business environment in terms of taxation, levels of corruption, economic freedom and ease of doing business. Also better market access for foreign investors needs to be provided. Till then, IFC would just remain a distant dream.