The International BFSI Business from International Financial Services Centre (IFSC) in India: The Changing Scenario
In “Sustainable Development: Future Trajectory”, (Ed). Nilam Panchal, Himalaya Publishing House, Mumbai, for B. K. School of Business Management, Gujarat University, Ahmedabad, ISBN: 978-93-5273-890-8, pp. 19-28.
13 Pages Posted: 20 Apr 2018
Date Written: January 8, 2018
International Financial Services Centre (IFSC) seeks to bring to the Indian shores, those financial services transactions that are currently carried on outside India by overseas financial institutions, Indian financial institutions/entities and overseas branches/subsidiaries of Indian financial institutions to a centre which has been designated for all practical purposes as a location having the same ecosystem as their present offshore location, which is physically on Indian Shore. IFSC in Indian context may be defined as centre that provides International Financial Services (IFS) to non-residents and residents in any currency except Indian Rupee from Indian Soil. Financial Services have been contributing significantly to GDP. It is recognised that current and capital account flows invariably involve IFS transactions. The 2007 report of the committee set up by the finance ministry had estimated that even under conservative assumptions, purchases by Indian households and firms of IFS will be nearly $50 billion by 2015, and could exceed $120 billion by 2025. Globally International Financial Centres are major contributor to the business of International Banking, Financial Services & Insurance (BFSI). India, although being a large consumer of international financial services (IFS), only recently (2015) launched IFSC in India. With the starting of the IFSC in India, the landscape of International BFSI is changing rapidly. India, now has a centre through which it can serve both Indian & Global Institutions for their International BFSI requirements. Thus, the new business rules and undertaking of foreign currency transactions under the IFSC, with the similar benefits that had been occurring globally, will completely change the ways International BFSI business carried out in India. In this scenario, the paper attempts to describe how IFSC is changing the landscape for the International BFSI business in India.
Note: This paper was presented in 3rd International Youth Summit, organized by B. K. School of Business Management, Gujarat University, Ahmedabad during Jan. 30-31, 2018 and is published in its reading book “Sustainable Development: Future Trajectory”, (Ed.), Nilam Panchal, and is uploaded with the permission of the B. K. School of Management.
Keywords: International Financial Services Centre, International Financial Services, Banking Financial Services & Insurance, Global Financial Centres, Economic benefit, BFSI business.
JEL Classification: G1, G14, G15, G2, E43
Suggested Citation: Suggested Citation