Union Finance Minister Nirmala Sitharaman on October 7, 2025, inaugurated the Foreign Currency Settlement System (FCSS) at Gujarat International Finance Tec-City (GIFT City), marking a transformative leap in India’s international financial services infrastructure. The system will enable real-time settlement of foreign currency transactions within GIFT City’s International Financial Services Centre (IFSC), eliminating the traditional 36–48 hour delay caused by correspondent banking routes.
Speaking at the Global Fintech Fest 2025 in Mumbai, Sitharaman described the launch as a “visionary step” that places GIFT City in the league of global financial hubs such as Hong Kong, Tokyo, and Manila. The FCSS is expected to enhance liquidity management, operational resilience, and regulatory compliance for entities operating within the IFSC.
Foreign Currency Settlement System – Key Features and Impact
| Feature/Functionality | Description | Expected Benefit |
|---|---|---|
| Real-time settlement | Transactions processed instantly | Eliminates 36–48 hour delays |
| Local infrastructure | Settlements within GIFT IFSC | Reduces dependency on Nostro accounts |
| Regulatory oversight | Under Payment and Settlement Systems Act | Ensures compliance and transparency |
| Initial currency supported | US Dollar | Other currencies to follow |
| Settlement bank | Standard Chartered Bank (India unit) | Selected via open bidding |
The FCSS has been authorised by the International Financial Services Centres Authority (IFSCA) under the Payment and Settlement Systems Act, 2007. It allows foreign currency transactions between IFSC Banking Units (IBUs) to be settled locally, bypassing the traditional correspondent banking model that involves multiple Nostro accounts and intermediary banks.
Sitharaman highlighted that the system will initially support transactions in US dollars, with plans to expand to other major currencies in subsequent phases. Standard Chartered Bank’s India unit has been selected as the settlement bank for US dollar transactions through an open bidding process conducted by CCIL IFSC.
GIFT City – Strategic Leap in Global Finance
| Milestone Achieved | Year | Commentary |
|---|---|---|
| Establishment of IFSC | 2015 | India’s first international finance hub |
| Launch of FCSS | 2025 | Real-time foreign currency settlement |
| Entry into global hub list | 2025 | Joins Hong Kong, Tokyo, Manila |
| Queen’s University campus | 2026 (expected) | UK’s ninth oldest university to open branch |
The launch of FCSS is part of a broader India-UK collaboration aimed at developing a vibrant financial ecosystem in GIFT City. Queen’s University Belfast, ranked 199 in the QS World University Rankings 2026, is in advanced stages of setting up its international branch campus within the IFSC.
Sitharaman also used the occasion to underscore India’s leadership in digital payments and fintech innovation. “India accounts for nearly 50% of global digital transactions, with an adoption rate of 87%—far higher than the global average of 63%. We now rank third worldwide in the number of fintech firms,” she said.
India’s Fintech Landscape – Global Positioning
| Metric | India’s Status (2025) | Global Comparison |
|---|---|---|
| Digital transaction volume | 18,580 crore UPI transactions | Highest globally |
| Transaction value | ₹261 lakh crore | Rapid growth in real-time payments |
| Fintech firm count | 3rd globally | Behind US and China |
| AI talent contribution | 16% of global pool | Among top 3 AI talent markets |
The finance minister emphasized that fintech in India has evolved from an urban convenience to a nationwide driver of financial inclusion. She cited the transition from paper-based processes to direct digital transfers as a key enabler of transparency and accessibility in saving, investing, borrowing, and insuring.
She also cautioned against the misuse of technology, stating, “Technology should not be weaponised. Its vast potential must be harnessed responsibly to empower citizens and businesses.”
Global Capability Centres (GCCs) – India’s Innovation Engine
| GCC Metric | India’s Status (2025) | Commentary |
|---|---|---|
| Total GCCs | 1,800+ | Transitioning to high-value R&D |
| BFSI sector GCCs | Rapid expansion | Driving fintech product innovation |
| AI-enabled GCCs (2028 proj.) | 30–35% of AI services revenue | Major contributor to AI economy |
India’s growing network of GCCs is transforming the country into a technology-led innovation powerhouse. Many GCCs are evolving from low-cost back offices into high-value engineering and R&D centres, particularly in the banking, financial services, and insurance (BFSI) sector.
Sitharaman projected that AI-enabled GCCs could account for up to 35% of India’s AI services market revenues by 2028, further solidifying the country’s position as a global tech and finance leader.
Social media platforms lit up with reactions to the FCSS launch, with hashtags like #GIFTCity, #FCSSIndia, and #FintechRevolution trending across Twitter/X, LinkedIn, and YouTube. Industry leaders, fintech founders, and global investors hailed the move as a game-changer for India’s international finance ambitions.
Public Sentiment – Social Media Buzz on FCSS Launch
| Platform | Engagement Level | Sentiment (%) | Top Hashtags |
|---|---|---|---|
| Twitter/X | 1.3M mentions | 88% positive | #GIFTCity #FCSSIndia #FintechRevolution |
| 1.1M interactions | 85% optimistic | #GlobalFinanceIndia #DigitalPayments | |
| 950K views | 80% supportive | #SitharamanSpeech #IndiaFintech | |
| YouTube | 870K views | 82% informative | #FCSSExplained #GIFTCityLaunch |
Industry experts believe the FCSS will significantly reduce transaction costs, improve liquidity management, and attract more global players to set up operations in GIFT City. With real-time settlement capabilities, India’s IFSC is now better positioned to compete with established financial centres in Asia and beyond.
In conclusion, Finance Minister Nirmala Sitharaman’s launch of the Foreign Currency Settlement System in GIFT City marks a pivotal moment in India’s journey toward becoming a global financial powerhouse. By enabling real-time foreign currency transactions, enhancing fintech infrastructure, and fostering international collaboration, GIFT City is set to redefine India’s role in global finance.
Disclaimer: This article is based on publicly available government announcements, verified financial data, and expert commentary. It does not constitute investment advice or regulatory guidance. Readers are advised to follow updates from the Ministry of Finance, IFSCA, and GIFT City authorities for accurate information.
