Gujarat : GIFT City Aims to Streamline Cross-Border Payments with Dollar Settlement System

Ahmedabad : The Gujarat International Fin-Tech City (GIFT City) is taking steps to strengthen its global payment infrastructure by exploring the development of a dedicated dollar payment system. This initiative, currently in the consultation stage with the Reserve Bank of India (RBI), aims to significantly improve the efficiency of US dollar transactions within the international financial hub.

The current system, reliant on foreign nostro accounts held by domestic banks, often results in delays of several hours when transferring funds from overseas institutions to GIFT City. This new dollar payment system, envisioned to be modeled after the existing Real-Time Gross Settlement System (RTGS), has the potential to revolutionize cross-border transactions by facilitating instant settlements.

“The proposed system will significantly enhance the speed and efficiency of dollar-denominated transactions in GIFT City,” stated a spokesperson for the project. “This aligns with our overall vision of establishing GIFT City as a leading global financial center.”

The Clearing Corporation of India (CCI), with its extensive experience in managing RTGS operations, is considered a strong candidate to act as the facilitator for this new system. Leveraging their expertise would ensure a smooth and efficient implementation process.

The potential benefits of this initiative are multifaceted. By reducing transaction times, businesses operating within GIFT City will enjoy faster access to their funds, facilitating smoother international trade and financial activities. Additionally, the improved efficiency could attract further investment and establish GIFT City as a more competitive player in the global financial landscape.

The development of this dollar payment system marks a significant step towards strengthening GIFT City’s position as a major international financial hub. While the proposal is still under discussion, the potential for faster, more efficient cross-border transactions holds significant promise for the future of the city and its role in the global financial ecosystem.