Gujarat government plans to set up an international financial services centre (IFSC) under Sections 18 and 55 of the SEZ Act on more than 268 acre land at the Gujarat International Financial Tec-City (GIFT City).
The state government is awaiting the due-diligence approval of the ministries of commerce and finance for the IFSC. The IFSC would see financial transactions exclusively in foreign currencies.
The centre is intended to create a separate geographically and policy-wise ring-fenced space within GIFT City, which would deal in foreign currencies.
The state government plans to set up a foreign currencies services board to facilitate transactions within the IFSC.
The board would be a single-window foreign exchange transaction facilitator. It would receive applications, process and refer these to the regulatory bodies concerned, such as the central bank and the Securities and Exchange Board of India. It would also approve foreign exchange transactions within the IFSC.
Banking, financial and insurance service companies would also be present in the IFSC. Banks within the IFSC would also get the first right of refusal against Indian foreign exchange borrowers.
For instance, if an Indian company wishes to borrow foreign exchange from abroad, it would have to first approach banks within the IFSC. These banks would raise bulk finance internationally and lend to companies in the IFSC, reports suggest.