The Union Cabinet has approved the establishment of a unified authority for regulating all the financial services in International Financial Services centres (IFSC), like the Gujarat International Finance Tec-City (GIFT) in Gandhinagar, in India through International Financial Services Centres Authority Bill, 2019,The Hindu has reported.
An IFSC is aimed at offering a global-standard business and regulatory environment in order to encourage Indian companies that are conducting business in foreign financial centres, such a London and Singapore, to bring back their financial services and transactions to India.
“It would provide Indian corporate easier access to global financial markets. IFSC would also complement and promote further development of financial markets in India,” the government said in a release.
“Currently, the banking, capital markets and insurance sectors in IFSCs are regulated by multiple regulators, i.e. RBI, SEBI and IRDAI,” it added. The Bill proposes to empower the unified authority with “all powers exercisable by the respective financial sector regulatory” authorities.
“The dynamic nature of business in the IFSCs necessitates a high degree of inter-regulatory coordination. It also requires regular clarifications and frequent amendments in the existing regulations governing financial activities in IFSCs” said the statement.
As the development of financial services and products in IFSCs would require focussed and dedicated regulatory interventions, the government felt a need for having a unified financial regulator for IFSCs in India to ease the process and help in ease of doing business in India.
“The Authority shall regulate all such financial services, financial products and FIs in an IFSC which has already been permitted by the Financial Sector Regulators for IFSCs,” the government said.
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