Finance minister Nirmala Sitharaman on Tuesday announced the launch of a Foreign Currency Settlement System (FCSS) at GIFT City to facilitate “real-time” settlement of financial transactions in foreign currency by entities in the international financial services centre (IFSC).
“Transactions in foreign currency by entities in IFSC are currently settled through the correspondent banking arrangements, which are routed through different participants and multiple nostro banks. Such transactions are not settled on a real-time basis and are usually settled with a lag of up to 36 to 48 hours. That’s the present story,” the finance minister said at the Global Fintech Fest in Mumbai on Tuesday.
“But the foreign currency settlement system, which gets launched today, seeks to solve this problem by facilitating seamless and efficient settlement of foreign currency transactions within IFSC on a real-time basis. Not 36 hours, not 48 hours, but just as it happens, enhancing liquidity management and operational resilience, while ensuring compliance with regulatory oversight under the PSS (Payments and Settlement System) Act,” she said.
With the operationalisation of the foreign currency settlement system, GIFT City joins the likes of financial centres that include Hong Kong, Tokyo, Manila, among others, which have the infrastructure to settle foreign currency transactions locally, she said.
The International Financial Services Centres Authority, in a circular on October 7, said that it has authorised CCIL IFSC Limited, a subsidiary of Clearing Corporation of India, to operate the FCSS. The subsidiary has entered into an agreement with Standard Chartered to act as the settlement bank.
GIFT City has been expanding at a rapid pace, supported by regulatory easing. As of March 31, 2025, the IFSC had a total registration of 865 entities covering the banking sector, capital markets, fund management, bullion, insurance sector and aircraft leasing. During the January-March quarter of FY25, the cumulative banking transactions at GIFT City were $147.69 billion, while average monthly turnover at exchanges there was $92.15 billion.
She further urged fintech companies to balance innovation with prudence as they mature, emphasising trust, safety, and inclusion. She highlighted responsible regulation as key to sustainable growth, urged collaboration with regulators, and called for fintech solutions for MSMEs, women, and green finance.
Sitharaman also pitched for using technology for public good, while expressing her concern at “weaponising” the advancements at the global level.
Citing the darker side of AI, she said, “The same tools that power innovation can be weaponised for deception and for fraud. I’m not personalising it, but I can say I have seen several deep fake videos of myself being circulated online, manipulated to mislead citizens and distort facts.”
“The new generation of fraud is no longer about breaching firewalls. It’s about hacking trust. Criminals are using AI to mimic voices, clone identities, and create lifelike videos that can manipulate people,” she observed.