New Delhi:

The government on Monday appointed retired IAS officer Injeti Srinivas as the first chairman of the International Financial Services Centres Authority (IFSCA).

His appointment is for a period of three years from the date of assuming charge or until further order, whichever is earlier, according to an official order.

Srinivas retired as the corporate affairs secretary on May 31.

Gujarat-headquartered IFSCA will regulate all financial services in international financial services centres (IFSCs) in Gandhinagar.

The IFSCA was established on April 27 this year and the head office would be set up in Gandhinagar, according to a notification issued earlier this year. In December 2019, Parliament passed a bill to set up a unified authority for regulating all financial activities at IFSCs in the country.

The first IFSC in the country has been set up at Gujarat International Finance Tec-City (GIFT) in Gandhinagar.
The name of Srinivas was also doing the rounds for quite some time, as among the probables for the post of next Sebi chairman. 

GIFT IFSC already hosts major insurance players,GIC Re,New India and ECGC and Life Insurance Corporation, besides five insurance broking entities,

Insurance operations at the GIFT City has got a major boost with Insurance Regulatory and Development Authority of India (Irdai) having issued enabling regulations for undertaking offshore insurance business from IFSC. 

The Irdai regulations would help Indian insurers to set up their offshore office in GIFT SEZ IFSC to undertake dollar business which otherwise was restricted in India,

The government has already given some tax concession to help this centre develop as global financial hub in line with London and Singapore.Those firms opening office at GIFT IFSC are permitted a 10-year tax holiday, complete tax holiday in first five years and a tax reduction of 50 per cent for the remaining five years.

For export of services, insurance companies operating from IFSC are exempted from GST.

GIFT IFSC, being a foreign territory mainly conducts offshore business, so the restriction on shareholding does not apply in IFSC and thereby a foreign direct insurer has option to set up operations directly without any local partner.

This would become a big enabler for Indian direct and re-insurance players as it provides them a foreign branch in close proximity which would be operationally cost effective.