On April 27, 2020 The Central government notified that it has established International Financial Services Centres Authority(IFSCA), a unified body to regulate all financial services in International Financial Services Centres(IFSCs) in the country & its headquarters will be at Gandhinagar, Gujarat.Key points
i.The main function of the authority is to regulate financial products such as securities, deposits or contracts of insurance, financial services, and financial institutions which have been previously approved by any appropriate regulator in an IFSC.
ii.It will provide a single-window regulatory institution which accelerates the development of India’s first IFSC at the Gujarat International Financial Tec (GIFT) City, Gandhinagar, Gujarat.
iii.National and international institutions dealing with international financial services will utilise the IFSC platform for inbound and outbound investments with improved ease of doing business, thus making GIFT IFSC a global financial hub.
iv.Currently, banking, capital markets and insurance sectors in IFSC are regulated by multiple regulators like the Reserve Bank of India(RBI), Securities and Exchange Board of India (SEBI), and Insurance Regulatory and Development Authority of India (IRDAI).
v.The notification brings into force certain provisions of the IFSCA Act, 2019 in relation to the operation but the central government has excluded from exercising its full power of authority as envisaged in this Act.
vi.Even though the appointment of its members & other employees setting up of funds and exemption from taxes,the government has not enforced rules relating to the regulation of financial products, financial services and financial institutions in IFSCs and its abilities to transact in foreign currencies and make rules.
vii.As per the Act, the regulators include SEBI, RBI, IRDAI and The Pension Fund Regulatory and Development Authority.
viii.The IFSCA comprises a chairperson, and 1 member each nominated by the regulators mentioned & 2 members from the central government and full-time or part-time members.
It is established through International Financial Services Centres Authority Bill, 2019. It is a jurisdiction that provides financial services to resident and non-resident Indians in foreign currencies.
About GIFT City:
The aim is to develop a world-class smart city that becomes a global financial hub with the development of an International Financial Services Centre. It consists of a conducive Multi-Service SEZ (Special Economic Zone) and an exclusive Domestic Area & is a new Financial & Technology Gateway of India for the World.
Chairman– Sudhir Mankad