India’s unified financial hub is in advanced discussions with the RBI to let all domestic lenders settle forex trades in real time, a move that could reshape how money moves across borders. India is preparing for a major financial infrastructure upgrade that could put its international financial hub, GIFT City, firmly on the global fintech map.
The International Financial Services Centres Authority (IFSCA) — regulator for GIFT City is in active talks with the Reserve Bank of India (RBI) to allow domestic banks across India to settle foreign exchange (FX) transactions in real time using the city’s new digital clearing system. If approved, this will enable Indian banks to complete dollar transactions in seconds instead of waiting nearly a full business day, sharply reducing settlement risks and improving liquidity in the financial system.
How GIFT City’s real-time settlement system works?
Earlier this year, GIFT City introduced a real-time foreign currency settlement system, a breakthrough that brings global financial market capabilities to Indian soil. The system allows transactions in major currencies to be cleared instantly within India’s jurisdiction.
The first phase went live with Standard Chartered Bank’s India unit, which was chosen to handle U.S. dollar clearances for entities operating inside GIFT City. The new system currently benefits banks with branches within the zone, but regulators are exploring a wider rollout.
According to officials, discussions with the RBI focus on extending this infrastructure to all Indian banks. If implemented, it would let banks anywhere in India use GIFT City’s platform for real-time settlement of dollar trades, a shift that could come within the next six to eight months.
Why does it matter for India’s financial ecosystem?
The move carries strategic implications that go far beyond faster transactions. It represents a push to reduce India’s dependence on overseas clearing hubs like London, Singapore, or Hong Kong, which currently handle most large FX settlements for Indian banks.
By bringing real-time settlement infrastructure home, India could:
– Cut cross-border settlement risk and reduce delays in global payments.
– Enhance transparency and oversight of foreign currency flows.
– Save costs for banks and corporations handling international trades.
– Strengthen GIFT City’s role as a trusted, technology-driven financial centre.
This step is also a part of India’s larger vision to turn GIFT City (Gujarat International Finance Tec-City) into the country’s fintech nerve centre, capable of matching global hubs in speed, innovation, and regulatory sophistication.
GIFT City’s growing global play
GIFT City has been steadily building momentum as India’s flagship financial innovation zone. Alongside the FX initiative, the National Stock Exchange (NSE) recently introduced daily expiry contracts for GIFT Nifty — a dollar-denominated derivative based on the Nifty 50 index.
Unlike retail derivatives, which have faced stricter regulations due to investor risks, the GIFT Nifty product caters to institutional investors and foreign funds, offering a controlled channel for global exposure to Indian markets. Together, these developments are drawing attention from global banks, asset managers, and fintech firms that see GIFT City as a competitive, well-regulated base for international operations.
India’s push toward a real-time, borderless future
If the RBI gives the go-ahead, real-time dollar settlement for all Indian banks could be a defining milestone in India’s journey toward a digitally empowered, globally integrated financial system.
Beyond speed, the shift underscores a broader ambition — to reimagine how India participates in global finance, not as a satellite of foreign clearing centres but as a hub in its own right. As one senior official put it, the aim is to make “India’s financial plumbing as fast, secure, and modern as its digital payments system.”
If successful, GIFT City’s latest innovation could well mark the beginning of a new chapter in how the world trades with India instantly, digitally and directly.
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