India: Unified financial regulator mooted for international financial service centre
Source: Asia Insurance Review | Feb 2018
The government is looking into creating a unified financial regulator for India’s only international financial service centre, Gujarat International Finance Tec (GIFT) City, after individual regulators indicated that they have no objection to the idea, according to GIFT Managing Director Ajay Pandey.
In a speech at the Vibrant Gujarat Summit last year, the Governor of the Reserve Bank of India, Mr Urjit Patel, pitched for a unified financial regulatory framework with a single regulator for GIFT City because it could contribute to better regulation and supervision of the financial entities in the City.
Offshore insurance business
Meanwhile, the IRDAI has issued regulations that would allow insurers to carry out offshore business from GIFT City. The companies would also be allowed to undertake domestic insurance and reinsurance business in line with IRDAI regulations.
Insurers with an office in GIFT City are granted a 10-year tax holiday, comprising a complete tax holiday in the first five years and a tax reduction of 50% for the remaining five years. For export of services, insurers are exempted from GST. A foreign direct insurer will also be allowed to set up operations directly without any local partner.
The IRDAI regulations would allow insurers in GIFT City to conduct dollar business which otherwise is restricted in India.
GIFT City already hosts three major insurance players, namely GIC Re, New India and ECGC, besides five insurance broking entities, he said. A