MUMBAI: India launched a brand new international foreign money settlement system by means of its International Financial Services Centre (IFSC) at GIFT City, aiming to speed up cross-border transactions and improve the nation’s enchantment as a world monetary hub.
Finance Minister Nirmala Sitharaman unveiled the Foreign Currency Settlement System (FCSS) on the Global Fintech Festival in Mumbai, calling it a “major step” towards sooner, extra environment friendly world funds.
“The foreign currency settlement system will facilitate seamless, real-time transactions, enhance liquidity management, and ensure compliance,” Sitharaman mentioned.
The FCSS will allow real-time or close to real-time settlement of international foreign money transactions inside the IFSC, changing the present correspondent banking mannequin that may take as much as 48 hours.
Currently, transactions by entities in GIFT City are routed by means of a number of intermediaries throughout world banks, including price and time to settlements. The new system, Sitharaman mentioned, “will ensure that transactions are not just faster, but also compliant under the Payment and Settlement Systems Act.”
With the launch, GIFT IFSC joins a choose group of world monetary centres, together with Hong Kong, Tokyo, and Manila, which have native infrastructure for international foreign money settlement.
“FCSS facilitates efficient settlement of foreign currency transactions within IFSC on a real-time basis, not 36 to 48 hours, enhancing liquidity management and operational resilience,” she mentioned.
Standard Chartered Bank’s India unit has been chosen as the primary financial institution to supply U.S. dollar clearing by means of the brand new system, officers mentioned. More banks are anticipated to be added because the framework expands to cowl different currencies.