What New Developments Did FM Sitharaman Introduce at the Global Fintech Fest?
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Synopsis
In a groundbreaking announcement at the Global Fintech Fest 2025, Finance Minister Nirmala Sitharaman unveiled a foreign currency settlement system designed to revolutionize international trade and investment in GIFT City. This innovative system promises real-time transaction capabilities, enhancing liquidity and compliance, positioning India as a global fintech leader.
Key Takeaways
- Introduction of foreign currency settlement system in GIFT City.
- Real-time transaction capabilities enhance international trade.
- GIFT IFSC joins elite global financial centers.
- Standard Chartered selected for US dollar clearance.
- India ranks third globally in fintech companies.
Mumbai, Oct 7 (NationPress) In a significant move to enhance international trade, investment, and simplify business operations, Finance Minister Nirmala Sitharaman introduced a new foreign currency settlement system in GIFT City on Tuesday.
While addressing the ‘Global Fintech Fest 2025’, Sitharaman emphasized that the foreign currency settlement system is aimed at resolving the challenges associated with seamless real-time transactions, improving liquidity management, and ensuring compliance.
She elaborated that the FCSS will serve as a payment framework within the International Financial Services Centre (IFSC), facilitating transactions in foreign currency on a real-time or nearly real-time basis. 'GIFT IFSC now joins a select group of financial hubs, including Hong Kong, Tokyo, and Manila, equipped to settle foreign currency transactions locally,' the Finance Minister stated.
With the launch of the FCSS, GIFT IFSC is now among a few global financial centers that possess the infrastructure necessary for local foreign currency transaction settlements.
Currently, foreign currency transactions by entities in the IFSC are routed through correspondent banking arrangements involving various participants and multiple banks, which do not facilitate real-time settlements.
Sitharaman indicated that the new system will enable efficient and seamless settlements of foreign currency transactions within the IFSC, significantly reducing the settlement time from 36-48 hours to real-time, thereby enhancing liquidity management and operational resilience, while ensuring compliance with the PSS Act.
As part of this initiative, Standard Chartered's Indian division has been designated for US dollar clearance.
The foreign currency settlement system has been meticulously designed to ensure that foreign currency transactions are completed in real-time or nearly real-time.
India now holds the third position globally in terms of the number of fintech companies and leads in digital transaction volumes, having recorded over 18,580 crore UPI transactions worth Rs 261 lakh crore in 2024-25.
The Gujarat International Finance Tec-City, commonly known as GIFT City, is a central business district located in Gandhinagar, Gujarat.
Point of View
I believe the introduction of the foreign currency settlement system in GIFT City marks a pivotal moment for India's fintech landscape. With its potential to streamline transactions and enhance compliance, this initiative reflects the government's commitment to fostering a robust business environment. Embracing such innovations will not only boost investor confidence but also place India on the global financial map.
NationPress
07/10/2025
Frequently Asked Questions
What is the foreign currency settlement system?
The foreign currency settlement system is a payment framework within the International Financial Services Centre that facilitates real-time or near real-time transactions in foreign currency.
How will this system benefit businesses?
The system will enable seamless and efficient settlements, enhancing liquidity management and operational resilience for businesses engaged in international trade.
Which financial center does GIFT IFSC compare to?
GIFT IFSC joins prominent financial centers like Hong Kong, Tokyo, and Manila, which also have infrastructure for local foreign currency transaction settlements.
What are the expected transaction time improvements?
With the FCSS, transaction settlements are expected to occur in real-time, significantly reducing the previous settlement time of 36-48 hours.
Which bank has been selected for US dollar clearance?
Standard Chartered's India unit has been chosen to handle US dollar clearance as part of the new system.
