SBI Considering To Enter Aircraft Leasing Business In India, Looking For Partners: Report

State Bank of India (SBI) is looking forward to venture into the aircraft leasing business in India and are in negotiations with the government to form aircraft leasing arms at the IFSC, reports Economic Times.

“We are evaluating options to handle aircraft leasing business in GIFT City subject to regulatory approvals and viability,” Ashwini Tewari, managing director – international banking, technology and subsidiaries of SBI reportedly told ET.

Earlier, the Civil aviation secretary Pradeep Singh Kharola revealed that international aircraft financing and leasing companies namely Acumen Aviation from Ireland and Investec Aviation Finance from London will establish aircraft leasing arms at the International Financial Services Centre (IFSC) in Gujarat’s GIFT City,

In budget announcement this year, several advantages such as tax holidays spanning across 10 years, waiver of basic custom duty, stamp duty, waiver of capital gain taxes on aircraft disposal during the tax holiday period and even holding back tax on interest payments on royalty for non-residents were announced to be provided to aircraft lessors at the IFSC.

The report further quotes a senior official as stating, “SBI does not have the expertise of running an aircraft leasing business and the bank is looking for a foreign partner that has the expertise in the sector.”

It should be noted that Bank of China had entered the aircraft leasing market as part of a strategy by the Chinese government to develop Beijing as a leasing hub for aircraft. This resulted is Bank of China becoming one of the largest aircraft leasing companies in the world. It has also leased over 25 aircraft to various airlines in India.