New Delhi [India], March 21 : As Silicon Valley Bank-led crisis in the US banking system and contagion effect on some others in a matter of just a week arose, India's International Financial Services Centres Authority (IFSCA) has constituted an expert committee to formulate a roadmap to onshore the Indian innovation to Gujarat's GIFT City.
GIFT city (Gujarat International Finance Tec-City) was envisaged as an integrated hub for financial and technology services not just for India but for the world.
According to an official release, the committee will be chaired by G Padmanabhan, former executive director, Reserve Bank of India. The committee includes representatives from leading venture capital funds, startups, fintechs, law firms, tax firms, among other domain experts.
The committee is expected to submit its recommendations within three months.
IFSCA is the unified regulator for the development and regulation of financial products, financial services and financial institutions in International Financial Services Centres (IFSCs) in India.
The terms of reference for the committee include measures required to encourage the Indian fintech or startups domiciled abroad to relocate to GIFT City.
The committee would also identify issues that are critical to the development of GIFT City as a global fintech hub, besides suggesting measures to encourage new fintechs having global outlook to setup their commercial presence.
"Additionally, the committee would also identify challenges and recommend measures for the development of International Innovation Hub at GIFT IFSC," it added.
The Indian startup ecosystem is the third largest globally, having 115 unicorns (billion-dollar enterprises).
Indian startups raised USD 44 billion in 2021, with over USD 33 billion going towards deals worth more than USD 5 million.
Many Indian startups are domiciled outside India - despite having the majority of their market, personnel and founders in India.
These "externalized" or "flipped" startups constitute a large number of India's unicorns, according to the release.
For the record, prominent global lender in the world of technology startups, the Silicon Valley Bank collapsed on March 10 after a run on the bank, forcing the US federal government to step in. Regulators shut down the tech lender and put it under the control of the US Federal Deposit Insurance Corporation (FDIC). Some other banks too were shut subsequently.
Currently, the FDIC is acting as a receiver, which typically means it will liquidate the bank's assets to pay back its customers, including depositors and creditors.
Last week, emphasising that the Indian banking system is resilient and strong amid the Silicon Valley Bank-led crisis in the US banking system, Union minister Rajeev Chandrasekhar had said startups should opt Indian banks as their preferred partners.
Union Minister of State for Electronics & IT said special provisions available at Gift City in Gujarat can be quick and impactful support for Indian startups.
The minister had also said a transfer of bank deposits worth over USD 200 million was made into GIFT City, Gujarat, which according to him was a sign of the Indian banking system's growing prominence.
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