India has officially launched a foreign currency settlement system through its GIFT City financial hub in Gujarat, a move expected to make cross-border transactions faster and cheaper. The initiative allows international payments to be settled in foreign currencies directly within India’s borders.
Standard Chartered Bank India has been designated as the first clearing bank to handle U.S. dollar settlements, according to the Reserve Bank of India (RBI). The framework is also open for euro, yen, and other major currencies in future phases.
Why this matters
- Boost for GIFT City: Positions India as a key player in global financial settlements.
- Faster trade flows: Companies can now settle invoices directly in foreign currencies.
- Reduced dependency: Lowers reliance on global clearing centers in New York or London.
- Investor confidence: Improves India’s appeal for multinational corporations and banks.
What’s next
- Expansion to more banks: Other global banks may join the framework soon.
- Rupee internationalization: Experts say this move aligns with India’s goal to make the rupee more globally relevant.
- Digital link: Integration with India’s Unified Payments Interface (UPI) for trade finance is under consideration.
Labels:
Finance • GIFT City • RBI • Banking • Standard Chartered • Cross-Border Payments
Read the Reuters report ↗
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