IFSCA FinTech Incentive Scheme

IFSCA FinTech Incentive Scheme- Relevance for UPSC Exam

GS Paper 2: Governance, Administration and Challenges
- Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Recently, the IFSCA (FinTech Incentive) Scheme for providing financial support to FinTech activities in the form of specific grant(s) was launched by the International Financial Services Centres Authority ( “IFSCA”).
- IFSCA aims to promote the establishment of a world-class FinTech Hub, at GIFT International Financial Services Centre (IFSC) in India.

IFSCA FinTech Incentive Scheme shall be open to-

Domestic FinTechs-
- Seeking access to overseas markets;
- Seeking listing on IFSCA recognised stock exchanges;
- Extending business to the IFSCs either by way of authorisation or registration or through the regulatory sandbox.
Foreign FinTechs:
- Seeking market access to IFSCs in India and work within the Authority’s regulatory framework;
- Seeking access to domestic market under Inter-Operable Regulatory Sandbox (IORS) framework;

The types of incentives for eligible applicants are:

FinTech Start-up grant– This grant shall be utilized for developing a product or a service and related ‘go-to market’ initiatives for a start-up with a novel FinTech idea or solution with a focus on converting the idea into an MVP.
Proof of Concept (PoC) grant- This grant shall be utilized for the purpose of conducting a PoC by an early or mature FinTech Entity (FE) in domestic market or overseas.
Sandbox grant- This grant shall be utilized by FEs to experiment with innovative products or services in a sandbox.
Green FinTech Grant- This grant shall be utilized towards developing solutions facilitating sustainable finance and sustainability linked finance, including ‘Environmental, Social and Governance (ESG)’ investments.
Accelerator Grant- This grant shall be utilized for supporting accelerators at the IFSC for capacity building, build capabilities around mentors, bringing investors, bringing more projects or PoC, tie ups, etc.
Listing Support Grant – The grant shall be utilized for supporting Domestic FE aspiring to go for listing on stock exchanges recognised by the Authority.

The Grants contemplated under the FinTech Incentive scheme shall be available to eligible FinTech Entities (Fes):

Who are part of the Authority’s Regulatory or Innovative Sandbox;
Which are referred to the Authority under a FinTech bridge arrangement with a Counterpart Regulator
Which have either participated or are participating in any Accelerator or Cohort or Special Programme supported or recognised by the Authority; or
Who are referred to by the entity(ies) including regulatory or supervisory bodies having Memorandum of Understanding (MoU) or collaboration or special arrangement with the Authority.

shivam