What Is IFSC
- An IFSC enables bringing back to India the financial services and transactions that are currently carried out in offshore financial centers by Indian corporate entities and overseas branches / subsidiaries of financial institutions (FIs) by offering business and regulatory environment that is comparable to other leading international financial centers in the world like London and Singapore.
- It would provide Indian corporates easier access to global financial markets. IFSC would also compliment and promote further development of financial markets in India.
- The first IFSC in India has been set up at GIFT City, Gandhinagar, Gujarat.
Need For Unified Regulator
- Currently, the banking, capital markets and insurance sectors in IFSC are regulated by multiple regulators, i.e. RBI, SEBI and IRDAI.
- The dynamic nature of business in the IFSCs necessitates a high degree of inter-regulatory coordination. The development of financial services and products in IFSCs would require focussed and dedicated regulatory interventions.
- It also requires regular clarifications and frequent amendments in the existing regulations governing financial activities in IFSCs.
- Further, this would also be essential from an ease of doing business perspective.
- This would also generate significant employment in the IFSCs in particular as well as financial sector in India as a whole.
- Hence, a need is felt for having a unified financial regulator for IFSCs in India to provide world class regulatory environment to financial market participants.
