With the launch of FCSS, GIFT International Financial Services Centre (IFSC) joins select group of financial centres that include Hong Kong, Tokyo, and so on, having infrastructure to settle foreign currency transactions locally.
About Foreign Currency Settlement System (FCSS)
- It is a payment system authorised by International Financial Services Centres Authority (IFSCA) under the Payment and Settlement Systems Act, 2007.
- Objective: Enables foreign currency transactions between IFSC Banking Units (IBUs) to be settled locally instead of routing through the traditional correspondent banking route.
- The system will initially settle transactions undertaken in US Dollar with scope for adding other foreign currencies over time.
- Operator of the FCSS: CCIL IFSC Limited (CCIL IFSC), a subsidiary of Clearing Corporation of India Limited.
- Benefits: This system will be able to settle transactions on a real-time or near real-time basis, thereby significantly reducing the settlement time.
- The traditional correspondent banking route involves multiple banks in the transaction chain, taking up to 36 to 48 hours for settlement.
About GIFT City & IFSCA
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