He also said IFSC would be developed as a global fintech hub and provide these technology firms a platform to expand their business overseas.
If India really has to become a USD 5 trillion economy, or even go beyond that, there has to be huge externalisation, he said while addressing the FICCI Fintech Expo.
“We are also soon coming up with the SPAC regulatory framework because that is the flavour of the day. When it comes to startups, they are not very well known entities. If they themselves come with an IPO, there may not be many takers.
“So, some established players with a blank cheque company will come and they with their credibility will mobilse money and then identify a proper target company and merge with that, in a two year or three year time span,” he said.
Observing that India did not play a very large role in the first three industrial revolutions, he said India can be the frontrunner in the fourth industrial revolution and has all the ingredients to actually lead the way.
He said India has about 2,400 Fintech firms which are growing exponentially.
“The IFSCA, I would like to emphasise, attaches huge importance to developing the FinTech hub. We want to be the frontrunners in this,” he said.
The IFSCA was established on April 27, 2020, with its head office in Gandhinagar to regulate and develop financial activities in IFSCs in the country.
The first and only International Financial Services Centre (IFSC) in the country has been set up at the Gujarat International Finance Tec-City (GIFT) in Gandhinagar.
Last month Finance Minister Nirmala Sitharaman in Budget 2021-22 announced that the government would support the development of a world class Fintech hub at the GIFT-IFSC.
Srinivas also said that the IFSC can act as the second engine of the Indian economy and be an external engine, which will not only channelize global capital flows into India, but it will also make the external face of India available in this centre.
“This is like an international jurisdiction because when you do export oriented business or export from India, you still have the capital account convertibility and other issues, and you may have different sectoral regulators, but if you walk over to the IFSC, you have a unified regulator, who regulates all the four segments of the financial sector,” he said.
Besides, he said, it provides full capital account convertibility and businesses are treated as an international jurisdiction.
“Overwhelming number Fintech startups have expressed their desire to work in the area of exports, but some of them feel that they may be too small and uncertainties may be too large, in a foreign jurisdiction, then you have an Indian jurisdiction, which is international,” he said.
Speaking at the event K Rajaraman, Additional Secretary, Finance Ministry said the government has taken significant steps in the recent budget, including a scheme to develop, promote and accelerate digital payments through financial assistance to National Payments Corporation of India (NPCI) and the banks involved in the process.
Joint working groups on Fintech with Singapore, UK and Philippines are on the way, Rajaraman said, adding, these will be acting as a bridge between India and the rest of the world.
India should have its own financial sector application programming interfaces (API) exchange, like Singapore’s Apex and the government would be happy to support and facilitate setting up this, he added.
APEX serves as a centralised data sharing platform for government agencies to share data seamlessly and securely through the use of Application Programming Interfaces or APIs. The Exchange enables central monitoring and security management for the APIs.