India Launches Real-Time Foreign Currency Settlement at GIFT City

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Synopsis: Union Finance Minister Nirmala Sitharaman has launched the
Foreign Currency Settlement System (FCSS) at GIFT City, enabling
real-time settlement of foreign currency transactions within IFSC. Speaking at the
Global Fintech Fest 2025 in Mumbai, she also highlighted India’s AI mission,
fintech growth, cybersecurity, and green finance initiatives.

Launch of Foreign Currency Settlement System

Finance Minister Nirmala Sitharaman on Tuesday announced the launch of the
Foreign Currency Settlement System (FCSS) at Gujarat International Finance Tec-City (GIFT City).
She called it a significant step toward India’s aspiration of becoming a global
financial and fintech hub.

The system allows real-time settlement of foreign currency transactions within IFSC,
cutting down the earlier lag of up to 48 hours. With this launch, GIFT-IFSC joins
other international financial centres such as Hong Kong, Tokyo, and Manila in
operating a localised foreign currency settlement system.

Benefits of FCSS

• Enhances liquidity management for financial institutions.
• Improves operational resilience and compliance under the Payment and Settlement Systems Act.
• Positions India among select hubs with advanced settlement infrastructure.

Strengthening India’s Fintech Ecosystem

Sitharaman said the FCSS complements India’s broader fintech mission by combining
innovation, regulation, and infrastructure. She noted that the government has laid
the groundwork for a vibrant and forward-looking fintech ecosystem.

India AI Mission and Global Talent

The Finance Minister highlighted the India AI Mission, which aims to make the country a
global hub for AI-driven innovation. India currently contributes 16% of global AI talent
and is among the top three AI markets worldwide. By 2028, AI-enabled Global Capability Centres
(GCCs) are expected to contribute 30–35% of India’s AI services revenue.

Technology and Risks

Encouraging fintech firms to leverage AI, blockchain, and intelligent finance, Sitharaman
urged the industry to build transparent and risk-predictive products. She cautioned about
emerging risks, citing her personal encounter with deepfake videos.
“The new generation of fraud is no longer about breaching firewalls, it’s about hacking trust,” she warned.

Commending Regulatory Initiatives

• @valid UPI handle launched by NPCI for verified payments.
• SEBI Check system introduced to verify intermediary credentials.

Four Key Messages to Fintech Firms

1. Prioritise fundamentals: profitability, compliance, and innovation.
2. Ensure safety and trust as fintech revenues approach USD 1.5 trillion by 2030.
3. Embrace responsible regulation and address financial inclusion gaps for MSMEs, women, and gig workers.
4. Promote green finance for sustainable growth.

Concluding Remarks

Reflecting on India’s digital journey since its first mobile call in 1995, Sitharaman
urged collective action to combat deepfakes and AI-based frauds.
“Our national mission must be to create a system that is not only the most innovative and inclusive
but also the most trusted and resilient,” she concluded.