On July 11, 2023, the International Financial Services Centres Authority (IFSCA) signed Memorandums of Understanding (MoUs) with Climate Policy Initiative -India (CPI) and IIML –EIC. These are detailed as below:
IFSCA MoU with CPI-India to cooperate on Sustainable Finance
IFSCA and CPI-India has signed a MoU for mutual assistance and cooperation to increase mobilization of global sustainable capital flows into India.
Key Points:
i.This MoU also includes research and joint convenings in the field of sustainable finance.
ii.It is a step towards helping India and other developing countries achieve their goals of producing zero net emissions and meeting the Sustainable Development Goals (SDGs) by making the International Financial Services Centre (IFSC) a global hub for sustainable finance.
What is the requirement of International Capital Flows/mobilization of sustainable finance in India?
To meet the climate investment needs in India and achieve a successful low-carbon transition, there is a requirement for greater international capital flows. According to CPI’s Landscape of Green Finance report in 2022, the total tracked climate investments for fiscal years 2018 to 2020 amounted to $40 to $50 billion per year, with about 85% from domestic sources. However, this falls short of the necessary investment and financing to meet India’s climate investment requirements.
- To bridge this gap, it is essential to attract more international capital flows, and this MoU is a step towards the same.
About CPI:
CPI is an expert in finance and policies. They work to improve important energy and land use practices all over the world. Its main goal is to help governments, businesses, and financial institutions promote economic growth while also addressing the challenges of climate change.
- CPI India Private Limited has been working to support India in fulfilling its global climate change commitments though: clean energy market catalysing initiatives, such as the US India Clean Energy Finance (USICEF), India Clean Energy Finance 2.0 (ICEF 2.0), Productive Use of Renewable Energy (PURE), India Distributed Solar Finance initiative (IDSF), the Global Innovation Lab for Climate Finance (India Chapter); among others.
Note: IFSCA develop and regulate the financial products, financial services, and financial institutions in the IFSC. Prior to the establishment of IFSCA, domestic financial regulators, namely the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Pension Fund Regulatory and Development Authority (PFRDA), and Insurance Regulatory and Development Authority (IRDA) regulated the business in IFSC.
IFSCA inks MoU with IIML -EIC to collaborate for supporting and facilitating FinTech and TechFin entities
IFSCA has also signed MoU with IIM Lucknow Enterprise Incubation Centre (IIML EIC) at IIM (Indian Institute of Management) Lucknow EIC, Noida campus in Uttar Pradesh (UP).
Key Points:
i.This MoU aims to establish a framework for collaboration and mutual understanding between both organizations for supporting and facilitating FinTech and TechFin entities.
ii.Under this, FinTechs registered with IIML EIC may be facilitated to access IFSCA’s Regulatory and Innovation Sandbox and apply to the IFSCA (FinTech Incentive) Scheme, 2022
About IIML EIC:
It is promoted by Indian IIM Lucknow and supported by National Science & Technology Entrepreneurship Development Board (NSTEDB), Department of Science and Technology (“DST”), Government of India, and Government of UP.
- It is focused on providing faster growth to new ventures for successful commercialization of technology / product through a combination of accelerator program, seed capital, corporate venture capital funds, smart co-working space, corporate market access, mentoring and training programs.
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Recent Related News:
i.On April 19, 2023, IndusInd Bank signed a USD 100 million long-term credit deal with the Japan Bank for International Cooperation (JBIC) to assist Indian firms interested in purchasing Japanese construction equipment. It is in line with the IFSCA’s objective to make GIFT City as hub for raising long term finance.
ii.Godrej Capital Limited, the financial services arm of the Godrej Group, and State Bank of India (SBI) have signed a MoU to strengthen their partnership, where the bank would provide various financial products and offerings.
About International Financial Services Centres Authority (IFSCA):
It was established in April 2020 under the International Financial Services Centres Authority Act, 2019.
Executive Director– Praveen Trivedi
Headquarters– Gandhinagar, Gujarat
