Finance minister Nirmala Sitharaman launches foreign currency settlement system in GIFT City

Union finance minister Nirmala Sitharaman launched the foreign currency settlement system on Tuesday at Gujarat International Finance Tec-City (GIFT City), marking a major step towards enhancing India’s standing as a global financial hub.

The system will enable the real-time settlement of foreign currency transactions within GIFT City’s International Financial Services Centre (IFSC), eliminating the delays that can last up to two days under the existing correspondent banking mechanism.

“Transactions in foreign currency by entities in IFSC are today settled through correspondent banking arrangements routed via multiple Nostro banks (foreign banks with which a domestic bank holds an account), often with a lag of up to 36 to 48 hours,” Sitharaman said at the Global Fintech Fest in Mumbai.

The system will improve liquidity management and operational resilience, while ensuring compliance under the Payment and Settlement Systems (PSS) Act.

With this launch, GIFT-IFSC joins a select group of financial centres, including Hong Kong, Tokyo, and Manila, that have local infrastructure to settle foreign currency transactions, she said.

This initiative strengthens GIFT City’s position as a gateway for global finance, Sitharaman said, urging fintechs to leverage the growing opportunities at India’s sole international financial centre.

Innovation powerhouse

She highlighted the country’s growing network of global capability centres (GCCs), calling them “the driving force of India’s transformation into a technology-led innovation powerhouse”.

India now hosts over 1,800 GCCs, many of which are transitioning from low-cost back offices into high-value engineering, research and development, and innovation centres, especially in the banking, financial services and insurance (BFSI) sector.

India’s fintech GCCs are enabling multinationals to launch new digital financial products faster, reduce costs, and deploy artificial intelligence-led financial services at a global scale, she said, adding that India offers a unique combination of deep talent, cost efficiency, and supportive policy frameworks.

Sitharaman also said India contributes 16% of global AI talent and ranks among the top three AI talent markets worldwide. She projected that AI-enabled GCCs could account for up to 30-35% of India’s AI services market revenues by 2028.

She also encouraged fintechs and AI innovators to create solutions tailored for India’s linguistic and social diversity. “Our AI stack must be rooted in Indian languages, local contexts, and multi-modal interfaces so that it can be widely accessed by our citizens.”

Balance innovation with prudence

Delivering four key messages to India’s fintech sector, Sitharaman urged firms to focus on fundamentals, including profitability, risk management, and compliance, even as they innovate.

She also cautioned that rapid digitalization must be accompanied by robust safeguards. With India’s diverse population shifting from cash-based to digital systems, she said, “speed and scale must walk hand in hand with safety”.

Global fintech revenues are projected to touch $1.5 trillion by 2030, in less than five years, she added.

Calling for “responsible regulation”, she likened it to “a seat belt for safe acceleration”, adding that mechanisms such as the Reserve Bank of India (RBI)’s regulatory sandbox and the self-regulatory organization (SRO) framework allow for “experimentation with accountability”.

In her concluding remarks, she urged fintechs to bridge the remaining gaps in India’s financial ecosystem, including MSME credit access, financial inclusion for women and gig workers, and green financing that supports the transition to a low-carbon economy.