Stay Informed: Latest Financial Services & IFSC Updates

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Stay Informed Latest Financial Services IFSC
Updates
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Financial services contribute to economic growth
and development by facilitating banking,
investment, savings, insurance, stock markets,
debt, and equity shares. These services help
private entities and individuals save funds,
compete in the market, and protect against risks
and ambiguity. They also contribute to the GDP
and promote liquidity. Financial services
generate employment, reduce the cost of
transactions and borrowing, and minimise
asymmetric information. International Financial
Services Centres (IFSCs), on the other hand,
cater to customers outside the jurisdiction of
the domestic economy. They deal with flows of
finance, financial products, and services across
borders. IFSCs provide a platform for
world-class financial services to non-residents
and residents in a currency other than the
domestic currency of the location where the IFSC
is located. 
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They attract overseas investors by providing
financial services that are currently being
carried out outside India by overseas financial
institutions. IFSCs encourage all major global
players to operate in such facilities, which in
turn facilitates a two-way flow of finance,
financial products, financial services,
etc. Recent Developments Shaping Financial
Services Today In today's rapidly evolving
financial landscape, change is not just a
constant it's a necessity. Financial
institutions are navigating a dynamic environment
shaped by emerging technologies, shifting
customer expectations, and global trends. Let's
delve into the transformative forces currently
reshaping the financial sector.
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•        Digital Transformation on the Cloud
  Financial institutions are increasingly moving
  their operations to the cloud for better
  scalability, flexibility, and cost-effectiveness.
•         Better User Experience Institutions are
  focusing on improving the user experience to
  retain customers and attract new ones. This
  includes everything from user-friendly interfaces
  to personalised services.
•          Industry Consolidation Mergers and
  acquisitions are becoming more common as
  institutions seek to expand their offerings and
  reach.
•         Data-Driven Approach Financial
  services are leveraging big data and analytics to
  make informed decisions, understand customer
  behaviour, and offer personalised services.

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•        Scaling and Real-Time Processing
  Institutions are investing in technologies that
  allow for real-time processing of transactions
  and other financial activities.
•         ESG Practices Environmental, Social, and
  Governance (ESG) practices are becoming a focus
  area for financial institutions. They're
  considering ESG factors in their investment
  decisions and business practices.
•         Embedded Finance This trend involves
  non-financial firms offering financial products
  or services directly to their customers. It's
  becoming increasingly popular as companies seek
  to provide more value to their customers.
• Key Updates and Trends Currently Impacting the
  IFSC

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• Now, lets take a look at some key updates and
  trends currently impacting the International
  Financial Services Centre (IFSC)
•          Tax Amendments The Finance Bill, 2023
  has proposed several amendments related to the
  IFSC. These include
• o   Increasing the tax rate applicable on royalty
  and fees for technical services in the case of
  non-resident taxpayers who do not have a
  Permanent Establishment (PE) in India to 20.
• o   Providing an exemption on certain incomes
  arising to non-residents or aircraft leasing
  entities from aircraft leasing business in the
  IFSC.

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• o   Offering a concessional tax rate on dividends
  issued by the IFSC unit to its
• non-resident shareholders.
• o   Offering a concessional tax rate on interest
  earned on long-term bonds or rupee-denominated
  bonds listed only on the IFSC stock exchanges.
•          Extended Time for Tax-Neutral
  Relocation The Budget 2023 proposes to extend
  the time for tax-neutral relocation of funds from
  overseas jurisdictions into GIFT IFSC from March
  31, 2023, by another two years. This will give
  more time to asset managers who recently got
  permission to work in GIFT IFSC or are in the
  process. They can now think about starting brand
  new funds or moving their existing ones there.

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         Non-Applicability of Surcharge and
Cess There is a proposal for the
non-applicability of surcharge and cess on
certain incomes earned by specified funds in the
International Financial Service Centre
(IFSC). Navigating the Financial Services
Institutions Landscape as an Entity Navigating
the landscape of financial services institutions
can be complex, but here are some strategies that
can help. Consider these six core principles and
you should be good to go. 1.      Stay Informed
Keep yourself updated about the latest trends and
developments in the financial services industry.
This could be through news updates, financial
blogs (like the one youre reading right now),
podcasts, or newsletters.
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2.      Understand Regulatory Changes Financial
institutions operate in a heavily regulated
environment. Understanding these regulations and
how they impact financial services is crucial.
This could involve staying updated on regulatory
changes and understanding their
implications. 3.      Leverage Technology Many
financial institutions are undergoing digital
transformations. Understanding these technologies
and how to leverage them can provide a
competitive edge. 4.      Network Building
relationships with professionals in the industry
can provide valuable insights and opportunities.
This might mean going to industry gatherings,
becoming a part of professional groups, or
engaging in discussions on the internet.
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5.      Seek Expert Advice If you're unsure
about certain aspects of the financial services
landscape, don't hesitate to seek advice from
experts. This could be financial advisors,
industry analysts, or experienced
colleagues. 6.      Customer Focus Always keep
the customer at the centre of your strategy.
Understand their needs and preferences and how
they are changing. What Regulatory Changes Are
Currently Influencing the Finance Industry? A
host of regulatory changes are reshaping the
finance industry. Lets discuss the key
regulatory changes that are currently influencing
the finance industry.          Increased
Supervision and Enforcement Regulatory agencies
in 2023 will continue executing their broad and
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• ambitious agendas. Anticipate more attention on
  supervision, rule enforcement, and inquiries,
  both with existing and new regulations.
•  Climate and Sustainability Social and political
  discord, risk management, governance,
  scenario/stress test analysis, and
  investment/strategic markets are all areas of
  focus.
•   Transparency and Reporting There is an
  increased focus on reporting, market structure,
  protections, and controls.
•    Data and Cybersecurity Cyber risk management
  and governance, data collection, and privacy are
  key areas of concern.
•      

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• Technology and Resiliency Modern technology risk
  management, technology resiliency, and operation
  resiliency are becoming increasingly important.
•  Credit and Capital Capital shifts, credit risk
  sizing and concentration, and effective
  compliance are areas of focus.
• Fairness and Inclusion Expanded "fairness",
  impact and "justice", human capital, and DEI are
  becoming increasingly important.
•  Fraud and Financial Crime Regulatory focus,
  interplay with consumer protection, and evolving
  risks are key areas of concern.

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•   Payments and Crypto Regulatory authority and
  guardrails, instant payments and controls,
  disputes, complaints, and claims are all areas of
  focus.
•  Fintech Regulations By mid-2023, providers will
  face harsher regulatory procedures. The new
  directives will necessitate Buy Now, Pay Later
  (BNPL) providers carrying out in-depth credit
  checks on consumers to ensure that they can
  afford to take out loans.
• What Does the Future Hold for the Finance
  Industry, and How Can We Adapt?
• The future of the finance industry is expected to
  be shaped by several key trends. Lets explore
  the key priorities and strategies that are
  shaping the industry.

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•   Finance Transformation Finance leaders are
  prioritising leading finance transformation,
  finance technology, and human-centric work. They
  are focusing on initiatives that matter, such as
  transforming to deliver real-time and predictive
  insights, effortless compliance, and greater
  flexibility in finance strategy.
•    Data and Analytics Strategy By 2025, 50 of
  FPA leaders will have enterprise-wide data
  strategy as a key responsibility. Financial
  leaders need to play a bigger part in overseeing
  data and analytics (DA) within their
  organisations and improve their grasp of the
  fundamental DA principles.
•    Align Spend to Growth CFOs must add capital
  activism to their more traditional attempts to
  streamline capital

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• allocation processes. Capital activism takes
  postures embraced by the most productive activist
  investors and private equity firms and applies
  them to the internal management of capital
  through CFOs and their teams.
•         Digital Transformation The convergence
  of customer demands, technological advances, and
  government choices will significantly impact the
  direction of financial industry market trends.
• Conclusion
• Understanding the latest trends, regulatory
  changes, and developments in financial services
  and International Financial Services Centres
  (IFSCs) can lead to better decision-making, 

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effective risk management, and the identification
of new opportunities for growth. It also ensures
regulatory compliance and aids in effective
financial planning. As the financial landscape
continues to evolve, being well-informed will
provide a competitive edge, helping individuals
and businesses alike navigate through
complexities and thrive in the face of change.
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