12 December 2019
New Delhi: Paving the way for setting up an authority to develop and regulate the financial services market in the international financial services centres (IFSCs), the Rajya Sabha on Thursday passed the International Financial Services Centres Authority Bill.
The proposed authority will comprise nine members, including a Chairperson. The first IFSC was set up at Gujarat International Finance Tec-City (GIFT) in Gandhinagar.
Replying to the debate on the Bill, Finance Minister Nirmala Sitharaman said the announcement for setting up a unified regulator was made in 2018 and the Bill had been brought now.
To the remark of Jairam Ramesh (Congress) calling the progress at the GIFT City as abysmal against the projections, the Minister said two stock exchanges were operating from the IFSC and the daily volume had crossed $4 billion.
She said, 13 international class banks were operating there and had $24 billion transactions.
"Forty 40 operational brokers and over 100 licenced brokers are engaged in institutional broking services and proprietary trading. There are 19 plus players in the insurance sector. Reinsurance businesses are being conducted. Insurance intermediaries are operating from there and the sum insured is in the range of $30 billion," the Minister said.
Earlier, participating in the debate, Ramesh said after 9 years of existence less than 3 million sqft commercial property out of 62 million sqft had been developed at the GIFT City. "It's an abysmal rate of progress. Obviously, the ambition with which GIFT City was created is yet to be fulfilled," he said.
In her reply, Sitharaman said though the IFSC was permitted, cleared and notified by the Commerce Ministry in 2011, it was only in 2015 that the regulatory bodies issued their guidelines.
Amar Patnaik (BJD) raised the issue of composition of performance review committee with two of its members being from the IFSC Authority itself, thus the possibility of conflict of interest.
Sitharaman, however, said it might appear as an in-house oversight committee but it would report to the board. "It follows the best practices in the world," the Minister said.
The International Financial Services Centres Authority Bill, 2019 would now head for the President's assent.