Tag: ifsca

Time to convert fintech initiatives into revolution: PM Modi

Banking & Finance

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Prime Minister Narendra Modi on Friday urged the fintech industry in India to convert their Fintech initiatives into a Fintech revolution.

“Now it is time to convert these Fintech initiatives into a Fintech revolution. A revolution that helps to achieve financial empowerment of every single citizen of the country”, Modi said after virtually inaugurating the InFinity Forum, a leadership forum on Financial Technology, jointly hosted by the Gift City regulator IFSCA and Bloomberg.

Modi highlighted that the Fintech industry in India is already innovating to enhance access to finance and the formal credit system to every person in the country.

He also said that technology is making a big shift in finance, and mobile payments last year exceeded ATM cash withdrawals for the first time. Without any physical branch offices, fully digital banks are already a reality, and may become commonplace in less than a decade, Modi added.

The two-day summit will see participation from more than 70 nations, while Indonesia, South Africa and the United Kingdom are partner countries.

This InFinity Forum has brought together the leading minds of the world in business and technology to discuss how technology and innovation can be leveraged by the Fintech industry for inclusive growth and serving humanity at large.

Modi said that India has proved that it is second to none when it comes to adopting technology or innovating around it.

Issues that need attention

While noting that common Indian has shown immense trust in the Indian Fintech ecosystem by embracing digital payments and such technologies, Modi highlighted that this trust is a responsibility. “ Trust means that you need to ensure that the interest of people are secured. Fintech innovation will be incomplete without fintech security innovation”, he said.

Gift City

On Gift City in Gujarat, Modi said that it is not merely a premise, it represents the promise of India’s democratic values, demand, demography and diversity. “ It represents India’s openness to ideas, innovation and investment. Gift City is a gateway to the global Fintech world. IFSC at Gift City was born out of the vision that finance combined with technology would be an important part of India’s future development. Our aim is to provide the best international financial services not just for India but for the world”, Modi said.

Prime Minister said that finance is the lifeblood of an economy, and technology is its carrier. Both are equally important for achieving “Antyodaya and Sarvodaya”.

He said that the flagship infinity forum is part of the endeavour to bring together all key stakeholders of the global Fintech industry to explore the limitless future of the industry.

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Insurance web aggregators: Gift City regulator seeks public comments on draft regulations

Banking & Finance

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Gift-city regulator IFSCA has sought public comments on the draft regulations it has framed for insurance web aggregators regarding their eligibility criteria, registration process and permissible activities.

An official release said that the public and stakeholders comments on the draft regulations have to be submitted by December 20.

It may be recalled that the International Financial Services Centres Authority (IFSCA) has already notified regulations on the regulatory framework for registration and operations of intermediaries or insurance intermediaries such as insurance brokers, corporate agents, third party administrators and surveyors and loss assessors.

Now, IFSCA is looking to put a regulatory framework for registration and operations of insurance web aggregators in International Financial Services Centres such as Gift City.

Insurance intermediaries are one of the most important part of an International Financial Services Centre for developing the essential ecosystem of a financial market and providing insurance solutions to a global clientele.

IFSCA has been established as a unified regulator to develop and regulate financial products, financial services and financial institutions in the IFSCs in India.

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GIFT City regulator eases reinsurance biz norms to lure foreign, Indian companies, BFSI News, ET BFSI

Personal Finance

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GIFT City

The International Financial Services Centre Authority (IFSCA), the regulator for Gujarat-based International Financial Services Centre (IFSC), has announced a new liberal regulatory regime for facilitating the formation of various international and Indian insurance businesses in the Gujarat International Finance Tec-City (GIFT City).

Global reinsurers can procure business from regions around India, by setting up operations at GIFT City.

No foreign reinsurer has set up operations at the centre till now, despite zero tax provision.

Eased rules

Under new regulations, foreign insurers and reinsurers can set up branch offices or subsidiaries as IFSC Insurance Offices (IIOs) to undertake insurance or reinsurance business from IFSC. Indian insurance and reinsurance companies, including foreign reinsurance branches (FRBs), registered with Insurance Regulatory and Development Authority of India, can also set up branch offices to undertake insurance or reinsurance business from IFSC.

In the case of a branch, a company does not need to bring in any capital, and in the case of subsidiaries, the companies will require a paid-up capital, as per Insurance Act, 1938, of Rs 100 crore for insurance and Rs 200 crore for reinsurance.

Onshore capital

No onshore assigned capital will be required for foreign insurers or foreign reinsurers setting up IIOs as branches. The assigned capital of $1.5 million can be maintained in home jurisdictions. Further, there’s no onshore solvency requirement for IIO in the IFSC. The assigned capital solvency margin will have to be maintained in the home jurisdiction.

The new regulations allow managing general agents under a binding agreement.

IFSCA efforts

The IFSCA has been making structured efforts to boost global investments in GIFT City, and to make IFSC a global financial hub at par with other IFSCs in the world. To boost the establishment of IFSC alternate investment funds, the IFSCA released a circular providing benefits with respect to leveraging activities, co-investment opportunities and relaxation of diversification norms. The desire of the IFSCA to form regulations that are intended to quickly bring the funds set up in IFSC at par with offshore funds is an important consideration for both foreign and Indian companies, while deciding on the jurisdiction of the fund.



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International arbitration centre at Gift City: IFSCA in talks with Law Ministry

Banking & Finance

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Gift City regulator IFSCA is close to setting up an international arbitration centre in Gift-IFSC, its Chairman Injeti Srinivas has said.

This international arbitration centre will be on the lines of Singapore international Arbitration Centre or London Commercial Arbitration centre.

“We will be able to do this by little tweaking of the Arbitration & Conciliation Act. IFSCA has already prepared a proposal and is in discussion with Union Law Ministry on this”, Srinivas said at a recent CII organised Financial Summit.

Gift-IFSC, which is currently the country’s sole international financial services centre, has an entirely separate financial jurisdiction with the International Financial Services Centre Authority ( IFSCA) as the unified regulator that has a holistic view of financial sector and enables its seamless integration. IFSCA has been empowered under 14 separate Central Acts

Srinivas said that IFSC should be looked at as a great opportunity for making India global and be treated as project of national importance.

IFSCA Chairman urged Corporate India to look at IFSC with more greater intent and integrate it with their plans to expand their global footprint.

Foreign bank branches

Today in less than a year, six foreign banks have opened their branches, Srinivas said. There are another eight in the pipeline, he added. “Gradually concentration of financial institution is also taking place in Gift City. Banks are the backbone of financial centre. Banks have much more liberty in terms of activities that can be undertaken in IFSC”, he added.

Fintechs

Srinivas said that IFSCA wants to leverage “our strength” with respect to cross border fintechs. “We are in the process of coming up with a fintech incentive scheme’, he added.

Company Law

Srinivas also said that IFSCA is looking at the company law tweaks to encourage SPACs (Special Purpose Acquisition Company) so as to enable them to look at Indian conpanies.

He highlighted that company law has been amended to allow unlisted companies to directly list abroad. ” The rules are yet to come for this. We are hopeful this would soon happen”, he said. It would then encourage Indian startups to first list at Gift City instead of going to Singapore or other overseas markets, he added.

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Longevity finance: Gift-City regulator IFSCA sets up expert committee

Banking & Finance

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Gift-City regulator IFSCA has set up an expert committee to recommend approach towards development of Longevity Finance Hub in the Gift-City in Gujarat and provide a road map for the same.

The expert committee is being co-chaired by Kaku Nakhate, President and Country Head (India), Bank of America, and Gopalan Srinivasan, Ex-CMD, New India Assurance Company Limited.

The committee members comprise leaders from the entire longevity finance ecosystem including from areas such as banking, insurance, wealth management, fintech, legal, compliance and management consultancy, an official release said.

Global estimates suggest that there are one billion people in the silver generation (a global cohort of individuals aged 60 and older) with a combined spending power of $15 trillion and the size is ever expanding.

Development in medicinal science and technology will support extending of lifespan and longevity of the silver generation. It is estimated that by 2040, there will be more members of the silver generation than people under 20. This demographic change will throw open new challenges and opportunities especially in the areas of wealth management, health, insurance, and other investment products, the release added.

This has prompted the International Financial Services Centre Authority to set up an expert committee.

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IFSCA permits Banking Units to transfer assets through participation agreements

Banking & Finance

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International Financial Services Centres Authority (IFSCA) has allowed Banking Units (BUs) to transfer assets to/from other financial institutions, persons resident in India and persons resident outside India through any internationally recognised standard risk participation agreement.

Transfer of assets through the risk participation agreement route is a common practice in many jurisdictions especially in the field of trade finance.

Such risk participation is undertaken as a bilateral contract under a standard document called a risk participation agreement between the two institutions (buying and selling entity).

One of the common standard risk participation agreement is the Master Risk Participation Agreement (MRPA) developed by the Bankers Association for Finance and Trade (BAFT).

This dispensation is expected to encourage risk participation of foreign currency assets through BUs in IFSC instead of banks in foreign jurisdictions, an official release said.

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