Finance Minister Launches Foreign Currency Settlement System at GIFT City

Union Finance Minister Nirmala Sitharaman launched the Foreign Currency Settlement System (FCSS) on October 7, 2025, at the International Financial Services Centre (IFSC) in Gujarat International Finance Tec-City (GIFT City).

• The launch marks a major step toward strengthening India’s financial market infrastructure and positioning GIFT City among top global financial hubs.

What the FCSS Enables

• The system allows real-time or near real-time settlement of foreign currency transactions by entities operating within GIFT IFSC.
• It replaces the traditional correspondent banking process, which involved delays of 36–48 hours.
• With FCSS, settlements in major currencies like the US dollar, euro, and yen can now occur domestically within India.

Global Significance

• The new system places GIFT City in an elite group of global financial centres such as Hong Kong, Tokyo, and Manila, which possess local foreign currency settlement infrastructure.
• This development enhances India’s competitiveness in international finance and supports the country’s vision to make GIFT City a global financial hub.

Institutional Framework

• The Reserve Bank of India (RBI) and the International Financial Services Centres Authority (IFSCA) collaborated to establish the FCSS.
• The mechanism allows Indian banks operating in GIFT City to clear and settle global trades locally, reducing dependence on foreign correspondent banks.

Benefits

• Reduced Settlement Time: From up to 48 hours to real-time or near real-time.
• Enhanced Liquidity Management: Faster fund availability for market participants.
• Lower Settlement Risk: Localised settlement ensures better control and transparency.
• Operational Efficiency: Eliminates reliance on overseas systems, reducing costs and delays.