A Bill to set up unified financial regulator in the international financial services centres, currently one functional at GIFT in Gujarat, was introduced in the Lok Sabha on Monday.
As of now, banking, capital markets and insurance sectors in the IFSC are regulated by multiple regulators such as the Reserve Bank of India (RBI), the Securities and Exchange Board of India (Sebi), and the Insurance Regulatory and Development Authority of India (Irdai).
"The development of financial products and services in the IFSC requires focused and dedicated regulatory interventions and requires a high-level inter-regulatory coordination.
"It is, therefore, decided to establish a unified financial regulator to provide world-class regulatory environment to such financial market participants and promote ease of doing business," said the 'state of object and reasons' of the Bill.
The International Financial Services Centres Authority Bill, 2019, was introduced by Finance Minister Nirmala Sitharaman.
The proposed Authority to be headed by chairman will have one member each from the RBI, Sebi, Irdai, and the Pension Fund Regulatory and Development Authority. It will also have two government nominees and two other members to be appointed by the cental government on recommendation of a select committee.
The chairman and members will hold office for three years.
According to the Bill, the International Financial Services Centres Authority to develop and regulate the financial services market in the IFSCs in India will be established.
The powers and functions of the financial sector regulators under the respective Acts will be exercised and performed by the Authority.
An IFSC is aimed at bringing back financial services and transactions that are currently being carried out in off-shore financial centres by Indian corporate entities and overseas branches by offering world class business and regulatory environment.
It would also enable Indian corporate easier access to global financial markets.