StanChart to settle dollar trades in India via CCIL platform in Gift City

Mumbai: Standard Chartered has tied up with the Clearing Corporation of India Ltd (CCIL) and International Financial Services Centres Authority (IFSCA) as the sole partner to settle and clear dollar-denominated trades on the latter’s soon-to-be launched dollar clearing platform.

The platform, set to launch on 7 October, is a clearing mechanism that will allow dollar clearing within Gift City, India's global finance hub in Gujarat's Ahmedabad.

“The entire dollar clearing that is happening in Gift City right now will move to this platform and every bank that is there, foreign and Indian bank, will become a member of this dollar clearing. A large number of the banks have already signed up and some others, as it goes live, will also sign up,” said P.D. Singh, chief executive officer of Standard Chartered India & South Asia, at a press conference in Mumbai on Thursday.

As part of its institutional banking business, Standard Chartered is currently the only correspondent bank to around 33-odd Indian banks, Singh said, adding that such a dollar-clearing platform is warranted because otherwise banks have to wait for US clearing hours to settle trades, which could now be locally cleared. The London-headquartered bank is among the top two for the Indian banking system in terms of Pound Sterling and Euro-based clearing.

“I think outside of the G3 currencies (US Dollar, Euro, and Yen), India is the largest volume of flows that we see in the correspondent banking system. The INR or the Indian Rupee is the largest currency that we see amongst all the others,” he said at the conference.

Even as the bank looks to grow its share in the dollar clearing business, Singh expects non-dollar denominated trades to pick up pace going forward. Chinese Yuan-based invoicing is already gaining traction, especially for imports of renewable energy equipment, while rupee invoicing—though slower to grow—is also picking up, he said.

“Rupee invoicing has been growing. It's a bit slow, but I think the time for rupee invoicing is coming, where there is more and more bilateral trade, and therefore it's possible to do this,” he said, adding that this has largely been seen in the European corridors and some other sectors, but is still limited to a few clients. “I'm only taking a guess, but it could be the Middle Eastern corridor which would grow faster,” he added.

A lot of these cross-border trades are seen stemming from an increase in merger and acquisition (M&A) activities, given that Indian corporations have been waiting for the right valuations to go and acquire offshore assets.

“They have seen very high valuations in the past. Currently, with the disruptions in the world economy, we are seeing a little more sensible valuation, which is why you see a lot more activity happening from Indian corporates going and buying–either the partners they were doing business with, or completely new businesses,” Singh said.

However, the tariffs could play spoilsport for some of this growth, with Singh highlighting definite reduction in global trade activity. This is because there is largely a ‘wait and watch’ approach being adopted for newer orders whereas existing orders are being more or less executed, leading to some amount of negotiations and bargaining, he added.

Assuming a 0.6-0.7% hit on GDP due to the cumulative 50% tariffs imposed by the US, Singh believes that much of this impact will be offset by the government’s ‘three-arrow’ approach of income tax cuts, GST rationalisation and reduction in interest rates. If the eighth pay commission payouts get rolled out, it could add another 100 basis points to the GDP, he said, adding that all this should support consumption, aided by some counterbalancing led by trade going to different corridors.

“When companies need to go to new markets, they need to understand regulations, the banking requirements, they need support. That's where we step in and help them out. We call them ‘corridor natives’, so you need to move to a new corridor, and that's where the bank can come and help you,” he said.

Within India too, he expects M&A opportunities to arise from mid-sized and large corporates looking to get into completely different or new business lines or adding value–either upstream or downstream, in addition to general consolidation and market share reach.

“The M&A activity will remain at these levels for sure. There are a lot of opportunities, for example, in renewable energy, there are platforms that want to buy or sell assets,” he said.

Standard Charted is working to leverage its global sector expertise and help put it to use in the Indian context, especially for infrastructure and project finance.

Optimistic about private capex revival on the back of rising consumption, the British bank is also betting big on green mobility alongside renewable energy.

“We have financed EV buses for municipalities and we are doing more of that. We have financed solar projects, wind projects, a few road projects,” Singh said, adding that while this is an important part of the business, it is not a “predominant part of our business”. Going forward, he expects a strong pipeline of these projects aided by newer technologies and better funding.

The Indian business currently accounts for around 20% of the global sustainable finance done by Standard Chartered, resulting in a 38% reduction in emissions for the bank globally, Singh said. On an overall basis, he expects the domestic corporate loan book of the bank to grow around 10% in FY26.