International Financial Services Centre
Also called: IFSC · Topic: Financial Markets, Instruments, Insurance and Pensions · NCERT: Beyond NCERT
Meaning
An International Financial Services Centre (IFSC) is a special zone that offers financial services to non-residents (people and firms based outside India) in foreign currency. It runs under its own separate set of rules. The aim is to bring back to India financial business that now goes to centres like Singapore and Dubai. In India, one single regulator, IFSCA, oversees the IFSC. IFSCA was created under the IFSCA Act 2019 and set up in 2020.
Example
India's first IFSC is at GIFT City in Gujarat. It hosts the exchanges NSE IX and India INX, and the India International Bullion Exchange (IIBX, 2022). From 2024, Indian companies were allowed to list their shares directly abroad, starting with these GIFT City exchanges. GIFT City also allows SPACs (shell companies that raise money through an IPO only to buy a private firm), which are not permitted on mainland Indian exchanges.
Don't confuse with
- Mainland Indian markets (BSE, NSE): these deal mainly with residents in rupees and are regulated by SEBI and RBI. The IFSC deals in foreign currency and has its own regulator, IFSCA.