What Is An IFSC And How Does It Work? - Mint
Maybe your like
- Home
- Latest News
- Extraclass
- ICICI Prudential share price
- Mint Hindi
- More
- Election 2025
- Sports
- Cricket News
- Science
- Health
- Entertainment
- Tools
- IFSC Code Finder
- Income Tax Calculator
- Silver Price Today
- Gold Rate Today
- Gold Rate in Delhi
- Gold Rate Hyderabad
- US
- US Trending
- Hollywood
- Business
- Explore Mint
- About us
- Print subscription
- Subscriber terms of use
- Privacy Policy
- Terms of Use
- Disclaimer
- Mint code
- Cookie Policy
- Code of ethics
- Sitemap
- Contact Us
- Hindustan Times
- Live Hindustan
- Healthshots
- HT US News
- HT Auto
- HT Tech
- Nifty 50
- Auto News
- Mint Money
- My Watchlist
- Newsletters
- My Vouchers
- Notifications
- My Reads
- For You
- Market Dashboard
- Bullion
- Gold
- Silver
- Fuel
- Petrol
- Diesel
- Commodities
- Gold
- GoldM
- Aluminium
- Menthaoil
- Silver
- SilverMIC
- GoldPetal
- Natural Gas
- Copper
- Zinc
- SilverM
- CrudeOil
- GoldGinuea
- Lead
- Cryptocurrency
- Smart Money
- Gold Prices Today
- Gold Price in Delhi
- Gold Price in Mumbai
- Gold Price in Chennai
- Gold Price in Hyderabad
- Gold Price in Kolkata
- Silver Prices Today
- Silver Price in Delhi
- Silver Price in Mumbai
- Silver Price in Chennai
- Silver Price in Hyderabad
- Silver Price in Kolkata
- Latest News Today
- India News
- World News
- US News Today
- Markets
- Stock Markets
- IPO News
- US Markets
- Mark To Market
- Bonds
- Commodity News
- Cryptocurrency
- Companies
- IPO News
- Start-ups
- Company Results
- Top Company Leader
- Premium
- Money News
- Personal Finance
- Q&A
- Opinion
- Economy
- Technology News
- Gadgets
- Tech Reviews
- App News
- Personal Loan
- personal loan emi calculator
- Personal Loan Interest Rate
- Personal Loan Eligibility
- Business Loan
- Instant Personal Loan
- Brand Studio
- Oracle CXO Leaders DialogueCXO Leaders Dialogue
- Oracle CXO Leaders Dialogue Hyderabad
- Oracle Seamless Cloud Migration
- Oracle Scaling Ambitions
- Oracle Mastering Multi cloud Strategy
- Zoho The Long Game
- Thoughtworks Digital Banking Platform Journey
- Lentra The State of Credit
- Mirae Asset MF Winning Over Volatility
- PGIM India MF Amend, Adjust, Adapt
- Goalteller Personal Financial Strategies
- Oracle Unlock The Value of CX
- Microsoft Future Tech Series
- Zoho Navigating The Future Of Work
- Databricks Generation AI Series
- Microsoft Future Ready
- Salesforce Tech4good Awards
- Rolling with the Boss
- Fairfox The Unstoppables
- Focus
- e-paper
- WSJ
- Economist
- Barron's
- MyMint
- Mint Premium
- IFSC Code Finder
- Income Tax Calculator
- SIP Calculator
- EMI Calculator
- Home Loan EMI Calculator
- Car Loan EMI
- NPS Calculator
- Videos
- WebStories
- Photos
- Podcasts
- Mint Lounge
- Mint Hindi
- Livehindustan
- Hindustan Times
- About Us
- Print Subscription
- Mint Authors
- Terms of Use
- Disclaimer
- Mint Code
- Code of ethics
- Cookie Policy
- Privacy Policy
- Privacy and cookie settings
- Subscriber - Terms of Use
- SITEMAP
- Contact Us
- Mint Apps
An international financial services centre caters to customers outside the jurisdiction of domestic economy, dealing with flows of finance, financial products and services across borders
Asit Ranjan MishraUpdated15 Jan 2015, 01:21 AM IST
Gujarat International Finance Tec-City Co. Ltd is being developed as the country’s first international financial services centre (IFSC). Mint explains the concept of an IFSC and how it functions.
What is an IFSC?
An IFSC caters to customers outside the jurisdiction of the domestic economy. Such centres deal with flows of finance, financial products and services across borders. London, New York and Singapore can be counted as global financial centres. Many emerging IFSCs around the world, such as Shanghai and Dubai, are aspiring to play a global role in the years to come. An expert panel headed by former World Bank economist Percy Mistry submitted a report on making Mumbai an international financial centre in 2007. However, the global financial crisis that unfolded in 2008 made countries including India cautious about rapidly opening up their financial sectors.
What are the services an IFSC can provide?
—Fund-raising services for individuals, corporations and governments
—Asset management and global portfolio diversification undertaken by pension funds, insurance companies and mutual funds
—Wealth management
—Global tax management and cross-border tax liability optimization, which provides a business opportunity for financial intermediaries, accountants and law firms.
—Global and regional corporate treasury management operations that involve fund-raising, liquidity investment and management and asset-liability matching
—Risk management operations such as insurance and reinsurance
—Merger and acquisition activities among trans-national corporations
Can an IFSC be set up in a special economic zone (SEZ)?
The SEZ Act 2005 allows setting up an IFSC in an SEZ or as an SEZ after approval from the central government.
What does an IFSC require?
IFSCs such as Dubai International Financial Centre and Shanghai International Financial Centre, which are located within SEZs, have six key building blocks:
—Rational legal regulatory framework
—Sustainable local economy
—Stable political environment
—Developed infrastructure
—Strategic location
—Good quality of life
Should an IFSC be located within an SEZ?
Since India has many restrictions on the financial sector, such as partial capital account convertibility, high SLR (statutory liquidity ratio) requirements and foreign investment restrictions, an SEZ can serve as a testing ground for financial sector reforms before they are rolled out in the entire nation. Apart from SEZ-related incentives, as per the SEZ Act, there is an exemption from the securities transaction tax levied under Section 98 of the Finance Act, 2004, in case taxable securities transactions are entered into by a non-resident through an IFSC.
Why are banks taking up space in the GIFT SEZ?
Commercial banks are allowed to open offshore banking units (OBUs) within SEZs, which are deemed as overseas branches. Such OBUs can trade in foreign currencies in overseas markets and also with Indian banks, raise funds in foreign currency as deposits and borrowings from non-resident sources and provide loans and liability products for clients. State Bank of India set up its first OBU at Santacruz Electronics Export Processing Zone in Mumbai, in 2003.
Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Business NewsIndustryWhat is an IFSC and how does it work?MoreOPEN IN APP✕Wait for it…
Log in to our website to save your bookmarks. It'll just take a moment.
Yes, Continue✕Wait for it…
Oops! Looks like you have exceeded the limit to bookmark the image. Remove some to bookmark this image.
Tag » What Is International Financial Services Centre
-
International Financial Services Centres Authority
-
About IFSCA - International Financial Services Centres Authority
-
International Financial Services Centre - Wikipedia
-
International Financial Services Centres And Opportunities For The ...
-
India Inx-India International Exchange IFSC Ltd, GIFT City, SEZ
-
International Financial Services Centres Authority (IFSCA) - Byju's
-
International Financial Services Centre Definition | Law Insider
-
What Is An International Finance Centre?
-
Monetary Authority Of Singapore And The International Financial ...
-
MAS And IFSCA To Pursue Cross-border FinTech Innovations
-
The Ireland International Financial Services Centre Company In 2022
-
All-About The International Financial Service Centre - Taxmann Blog
-
International Financial Services Centre | Irish Company | Britannica
-
Key Requirements For Setting Up A Successful International ...