IFSCA in process to set up International Arbitration Centre in GIFT IFSC

The International Financial Services Centres Authority (IFSCA) is in the process of setting up an International Arbitration Centre in the GIFT IFSC for speedy resolution of any dispute, its Chairperson Injeti Srinivas said on Friday.

The IFSCA is a unified authority for the development and regulation of financial products, financial services and financial institutions in the International Financial Services Centre (IFSC) in India. At present, the GIFT IFSC is the maiden international financial services centre in the country.

"In a financial centre, speedy dispute resolution is very critical. We are making some headway (in that direction) and are close to setting up an International Arbitration Centre in the GIFT IFSC," Srinivas said.

He was speaking at the Confederation of Indian Industry's (CII) financial markets summit.

The centre will be on the lines of the Singapore International Arbitration Centre, or the London Commercial Arbitration Centre, he said.

Srinivas said the IFSCA has already prepared a proposal and is in discussion with the law ministry to be able to bring this international arbitration.

The unified authority is also looking at setting up the International Bullion Exchange and has already come up with the regulations for it, he said.

Srinivas said BSE, NSE (National Stock Exchange), Central Depository Services Ltd (CDSL), National Securities Depository Ltd (NSDL) and Multi Commodity Exchange of India Ltd (MCX) have come together to establish a holding company for the bullion business in the IFSC.

"They have already floated the subsidiary The Bullion Exchange, which will function as they exchange and also as the clearing and settlement cooperation," he said.

The detail by-laws and the guidelines for the bullion exchange have been brought out, he added.

Srinivas said an effective trade finance arrangement can help small and medium enterprises (SMEs) get access to foreign capital.

"Today, large corporates can access foreign capital and external commercial borrowings but small and medium-sized companies find it very difficult. I feel that the IFSC can become a hub for SMEs to access trade finance," he said.

Srinivas said there is a huge opportunity in the area of real-time settlement of multi-currency settlement.

The NEFT (National Electronic Funds Transfer) and RTGS (Real-Time Gross Settlement) are very effective for domestic for remittances but in terms cross border remittances, there's a huge cost attached to it, he noted.

"We can emerge as a National Financial Laboratory for experimenting capital account convertibility in a phased manner. We are in discussion with the Reserve Bank of India for many of such proposals, including a possibility of having a Central Bank Digital Currency (CBDC) offshore INR," he said.

Srinivas said FinTech is an important area and the authority wants to leverage its strength with respect to cross border FinTech.

"We can become a gateway and we have taken some steps in the direction for foreign FinTech companies looking at market access in India, and for Indian FinTech companies, which are looking at market access overseas," he said.

IFSCA is in the process of building out a FinTech incentive scheme, he added.