Forex settlement next step by GIFT to onshore what's offshore

economictimes.indiatimes.com:

Gujarat International Finance Tec-City (GIFT City) will soon take another step to resemble state-of-the art global finance centres as the hub is set to launch its own foreign currency settlement system, K Rajaraman, chairperson of the International Financial Services Centres Authority (IFSCA) told Bhaskar Dutta in an interview. He also listed out the latest steps being taken by the IFSC Authority to «onshore what is offshore». Edited excerpts:

Markets have been telling us about the development of an international-style instant foreign exchange settlement system in GIFT City. What is happening on the ground?

Having a foreign currency settlement system (FCSS) for the IFSC has been a long-standing demand for market participants. Similar systems exist in major IFCs, most notably the Hong Kong Clearing House Automated Transfer System for settling US dollar and euro transactions. An FCSS system is being set up in the IFSC with the support of the RBI, along similar lines, which, in the first phase shall settle transactions between IBUs (IFSC banking units) in US dollars on a real-time or near-real-time basis. We are targeting for the system to be up and running by October 2024 at the latest. Other currencies may be added in due course. Once fully operational, the FCSS system will save IBUs both the time and cost of using the correspondent banking channel to settle transactions among themselves. For this purpose, the Clearing Corporation of India has set up a subsidiary in IFSC to act as the system operator for the FCSS.