International Financial Services Centres Authority (IFSCA)

IFSCA is a unified authority for the development and regulation of financial products, financial services, and financial institutions in international financial services centers.

About International Financial Services Centre (IFSC)

• An IFSC caters to customers outside the jurisdiction of the domestic economy.
• IFSC centres deal with flows of finance, financial products and services across borders.
• London, New York and Singapore can be considered as global financial centres.
• Gujarat International Finance Tec-City (GIFT) IFSC is the maiden IFSC in India.

About IFSCA

• IFSCA is a statutory body, established in 2020 under the International Financial Services Centres Authority Act, 2019. It is headquartered at GIFT City, Gandhinagar in Gujarat.
• Prior to the establishment of IFSCA, the domestic financial regulators, namely, RBI, SEBI, PFRDA and IRDAI regulated the business in IFSC.

Objective of IFSCA

• It acts as a unified regulator with a vision to promote ease of doing business in IFSC.
• Its main objective is to develop a strong global connect and focus on the needs of the Indian economy as well as to serve as an international financial platform.
• It also aims to ensure inter-regulatory coordination within the financial sector.

Composition of IFSCA

• The Chairperson.
• Four members to be nominated from the Reserve Bank of India (RBI) , the Securities Exchange Board of India (SEBI), the Insurance Regulatory and Development Authority of India (IRDAI), and the Pension Fund Regulatory and Development Authority (PFRDA).
• Two members from amongst officials of the Ministry of Finance.
• Two members to be appointed on the recommendation of a Selection Committee.

Recent activities of IFSCA

• IFSCA has invited public comments on the draft framework on sustainable and sustainability-linked lending by financial institutions in IFSCs.
• IFSCA and Indian Institute of Management Ahmedabad (IIMA) signed a MoU for cooperation to strengthen participation in conducting evidence-based policy research to aid policy formulation.
• IFSCA has become an Associate Member of the International Organization of Securities Commissions (IOSCO), which is the international organization that brings together the world’s securities regulators.

Budget 2022-23 had a proposal to allow setting up of world-class financial institutions free from domestic regulations under IFSCA. It will give a boost to human resources development in IFSC.

Month: Current Affairs - March, 2022

Category: Economy & Banking Current Affairs