Vibrant Gujarat: RBI governor Urjit Patel suggests unified regulator for IFSCs

RBI governor Urjit Patel says a legal framework for financial contracts in GIFT City could be enabled either by amending existing laws or enacting a new one


RBI governor Urjit Patel at the Vibrant Gujarat summit in Gandhinagar. Photo: Reuters
RBI governor Urjit Patel at the Vibrant Gujarat summit in Gandhinagar. Photo: Reuters

Gandhinagar: Reserve Bank of India (RBI) governor Urjit Patel said on Wednesday that a unified financial regulatory framework providing for a single regulator could contribute to better supervision of financial entities in Gujarat International Finance Tec-City (GIFT City).

GIFT City is India’s first International Finance Service Centre (IFSC). “The existing laws governing financial contracts in India should be reviewed and gaps addressed,” Patel said at a Vibrant Gujarat summit event in Gandhinagar on the business potential of IFSCs in India.

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“Based on the review, a world-class legal framework for financial contracts in GIFT could be enabled, either by appropriately amending the existing laws governing financial contracts or enacting a fresh law. Either way, this should be expedited, may be by constituting a high-level working group to address this gap in mission mode.”

He said there is a need to strengthen the legal framework applicable to entities operating in GIFT City and their counterparties in the domestic sector.

“While individual regulators can supervise the entities initially when the size of the business is small, a unified regulator would be necessary to pay undivided attention to the IFSC. Work on the design of such a framework should begin soon so as to be able to implement this in time,” Patel said.

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