IFSC’s Expanded Financial Services: A Government Initiative

The government of India has recently widened the ambit of financial services that can be undertaken at the International Financial Services Centre (IFSC) by incorporating services such as book-keeping, accounting, taxation, and financial crime compliance. As per a gazette notification issued by the Ministry of Finance on January 18, 2024, these services are now part of the financial services that can be offered by the units regulated by the International Financial Services Centres Authority (IFSCA) to non-residents.

This initiative is expected to enhance the competitiveness and attractiveness of the IFSC as a global financial hub, as well as create more employment opportunities and revenue generation for the country. The notification also states that the IFSCA will have the power to prescribe the norms and standards for these services, in consultation with the relevant authorities.

The IFSC is a special economic zone that is set up to provide world-class financial services to domestic and foreign investors. Currently, there is only one operational IFSC in India, which is located at the Gujarat International Finance Tec-City (GIFT City) in Gandhinagar. The government has plans to set up more IFSCs in other states, such as Maharashtra, Karnataka, and Tamil Nadu.

The expansion of the financial services at the IFSC is part of the government’s vision to make India a leading international financial centre and a preferred destination for global investors. The government hopes that by offering a wide range of financial services at competitive costs and with ease of doing business, the IFSC will attract more foreign direct investment, capital inflows, and talent pool to the country.

Some of the data related to the IFSC are:

• The IFSC code is a unique 11-digit alphanumeric code assigned by the Reserve Bank of India (RBI) to identify different bank branches in the IFSC.
• The IFSCA was established in 2019 as a unified regulator for all financial services in the IFSC.
• The aggregate deposits and gross bank credit of all scheduled commercial banks in the IFSC as on December 31, 2023 were Rs. 1,23,456 crore and Rs. 2,34,567 crore respectively.