Source: IFSCA
On October 7, Smt. Nirmala Sitharaman, Union Minister of Finance and Corporate Affairs, launched the Foreign Currency Settlement System (FCSS) for the GIFT International Financial Services Centre (IFSC). The launch took place during the Global Fintech Festival 2025 held in Mumbai.
The new system is a major upgrade to the financial infrastructure, enabling foreign currency transactions between licensed banks within GIFT City to be settled locally and almost instantly.
A Major Leap in Efficiency
The FCSS, authorized by the International Financial Services Centres Authority (IFSCA), directly addresses the significant delays of the traditional “correspondent banking route.” Previously, foreign currency payments between IFSC Banking Units (IBUs) had to be routed through banks in other countries, a process that took 36 to 48 hours to complete.
The new system eliminates this dependency, allowing transactions to be settled in real-time or near real-time.
Joining the Ranks of Global Leaders
With this infrastructure, GIFT IFSC now joins a handful of premier international financial centers, including Tokyo and Hong Kong, that possess the capability to settle foreign currency transactions locally. This move significantly enhances the operational efficiency and global competitiveness of the financial hub.
Shri K. Rajaraman, Chairperson of IFSCA, remarked that the launch was a “significant milestone” in GIFT IFSC’s journey. He stated that the “FCSS would make transactions faster, safer, and more cost-effective, while reducing settlement risk.”
How the New System Works
The FCSS appoints a single commercial bank as a central settlement bank. All other member IBUs hold accounts with this bank, allowing transactions to be cleared and settled directly between them without leaving the local system.
- System Operator: CCIL IFSC Limited, a subsidiary of the Clearing Corporation of India, will operate the FCSS.
- Settlement Bank: Standard Chartered Bank, through its IBU, was selected to serve as the settlement bank.
- Technology Partner: The system’s software was developed by Indian Financial Technology & Allied Services (IFTAS), a subsidiary of the Reserve Bank of India.
Initially, the system will handle transactions in U.S. Dollars, with plans to include other foreign currencies in the future.
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