Regulating Payment Service Providers In The IFSCA: A Primer

A.INTRODUCTION

The International Financial Services Centre Authority ("IFSCA"), the sole regulator in India's first International Financial Servies Centre ("IFSC"), namely, the Gujarat International Finance Tec-City ("GIFT City"), has been set up with the intent of establishing a holistic regulatory ecosystem in GIFT City. Through a unified regulatory approach, it has encouraged and allowed several fintech companies to seamlessly set up and commence business in the GIFT City, enabling them to cater to customers across the globe without being subject to an array of regulations from multiple regulators.

On the back of such exponential growth in the number of entities setting shop in the GIFT City, and multiple IFSC sandbox projects (predominantly composed of payment system providers) being on the brink of entering the operational phase, a robust payment system regulatory framework had become the need of the hour. To address this, the IFSCA has now issued the IFSCA