The International BFSI Business from International Financial Services Centre (IFSC) in India : The Changing Scenario

International Financial Services Centre (IFSC) seeks to bring to the Indian shores, those financial services transactions that are currently carried on outside India by overseas financial institutions, Indian financial institutions/entities and overseas branches/subsidiaries of Indian financial institutions to a centre which has been designated for all practical purposes as a location having the same ecosystem as their present offshore location, which is physically on Indian Shore. IFSC in Indian context may be defined as centre that provides International Financial Services (IFS) to non-residents and residents in any currency except Indian Rupee from Indian Soil. Financial Services have been contributing significantly to GDP. It is recognised that current and capital account flows invariably involve IFS transactions. The 2007 report of the committee set up by the finance ministry had estimated that even under conservative assumptions, purchases by Indian households and firms of IFS will be nearly $50 billion by 2015, and could exceed $120 billion by 2025. Globally International Financial Centres are major contributor to the business of International Banking, Financial Services & Insurance (BFSI). India, although being a large consumer of international financial services (IFS), only recently (2015) launched IFSC in India. With the starting of the IFSC in India, the landscape of International BFSI is changing rapidly. India, now has a centre through which it can serve both Indian & Global Institutions for their International BFSI requirements. Thus, the new business rules and undertaking of foreign currency transactions under the IFSC, with the similar benefits that had been occurring globally, will completely change the ways International BFSI business carried out in India. In this scenario, the paper attempts to describe how IFSC is changing the landscape for the International BFSI business in India