Current Context: : The Ministry of Finance has launched the Foreign Currency Settlement System (FCSS) at GIFT IFSC, placing India among select global centres like Hong Kong and Tokyo that have local foreign currency settlement infrastructure.

ABOUT FCSS

• Authorised By: International Financial Services Centres Authority (IFSCA).
• Objective: Enables local settlement of foreign currency transactions between IFSC Banking Units (IBUs).
• Initial Phase: Begins with US Dollar transactions, to be expanded later.
• Operator: CCIL IFSC Limited, subsidiary of Clearing Corporation of India Limited.
• Benefits:
  • Real-time settlement reduces delays from 48 hours to near-instant.
  • Reduces dependency on foreign correspondent banks.

ABOUT GIFT CITY & IFSCA

• GIFT City: India’s first operational smart city and home to the country’s only International Financial Services Centre (IFSC).
• IFSCA:
  • Established in 2020 under the IFSCA Act, 2019.
  • Regulates financial institutions in IFSC.
  • Headquarters: GIFT City, Gujarat.