Gandhinagar Current Affairs - 2020

Injeti Srinivas appointed as the 1st Chairman of IFSCA

Retired  1983 batch Indian Administrative Service (IAS) officer from the Odisha Cadre- Injeti Srinivas has been appointed as the 1st Chairman of the International Financial Services Centre Authority (IFSCA) on 6th July 2020.

Injeti Srinivas has retired as the Secretary of the Ministry of Corporate Affairs on 31st May 2020. He has been appointed for a period of three years as the Chairman of International Financial Services Centre Authority.

International Financial Services Centre Authority (IFSCA)

During the winter session of the Parliament in 2019, on 12th December the bill to set up a unified authority that will be regulating the financial activities across all the International Financial Services Centres (IFSCs) in the country was passed by the parliament.

On 27th April 2020, through a notification by the Union Ministry of Finance, the International Financial Services Centre Authority (IFSCA) was established. The notification also stated that the headquarter of the IFSCA will be in Gujarat’s capital city Gandhinagar (GIFT City: Gujarat International Finance Tec-City is the first IFSC of India which is also located at Gandhinagar).

IFSCA will consist of a Chairman, and one member will be nominated by each of the regulators under the IFSCA Act 2019 (SEBI, RBI, IRDAI etc are the regulators). Apart from this, there will also be two members of the Central Government in IFSCA.

Government to set-up a Unified Authority for Regulating Entities in IFSC

The Union Cabinet headed by Prime Minister Narendra Modi has approved setting up of a unified authority for regulating all financial services in international financial services centres (IFSCs) in the country. The government has approved a bill to set up a unified regulator.

Fact Box

The first IFSC in India was set up at GIFT City in Gandhinagar, Gujarat.

Promoting the Ease of Doing Business

IFSCs are set-up to bring back the financial services and transactions that are currently carried out in offshore financial centres by Indian corporate entities and overseas branches or subsidiaries of financial institutions (FIs) to India.

In order to ensure this, the business and regulatory environment must be comparable to other leading international financial centres in the world like London and Singapore. Currently, the banking, capital markets and insurance sectors in IFSCs are regulated by multiple regulators like the RBI, SEBI and IRDAI respectively.

For IFSCs to attain its objectives there is a need for inter-regulatory coordination. The establishment of a unified financial regulator for IFSCs will result in providing a world-class regulatory environment to market participants from the ease of doing business perspective.

For the setting up of a unified regulator, the Union cabinet has approved the International Financial Services Centres Authority Bill, 2019.