GoI and ADB sign $23 million loan agreement

News Excerpt:

Recently, the GoI and the Asian Development Bank (ADB) signed a $23 million loan agreement to enhance access to quality fintech education, research, and innovation at the Gujarat International Finance Tec-City (GIFT-City).

About the GIFT City:

  • Gujarat International Finance Tec-city (GIFT) SEZ is India’s first International Financial Services Centre (IFSC) under Special Economic Zone Act, 2005 (“SEZ Act 2005”). 
  • It is being developed as a global financial services hub. 
  • GIFT IFSC is a Multi Services Special Economic Zone with 105 hectares of land and commenced its business in April 2015.
  • GoI operationalized the International Financial Services Centre (IFSC) at GIFT Multi Services SEZ in April 2015. 
    • The Union Budget 2016 provided a competitive tax regime for the IFSC at GIFT SEZ. 
  • It is the vision of the incumbent Govt that GIFT IFSC emerges as a hub for international financial services activities.
  • GIFT City is an initiative of the Government of India and the State Government of Gujarat to foster India’s financial services and fintech ecosystem.

About the “GoI and ADB Agreement” Project:

  • This project will establish an International Fintech Institute (IFI) to strengthen fintech education, boost start-up success rates, and drive fintech research and innovation.
    • The IFI, set to be established in partnership with globally reputed institutes and universities, will offer industry-aligned fintech training programmes that meet international standards. 
    • The IFI will strengthen innovation and entrepreneurship by supporting startups, especially women-led, through incubation and acceleration services. 
    • The IFI will also collaborate with industry and venture capital funds to support the growth of fintech startups. 
  • The ADB project’s emphasis will be on: 
    • Market-driven fintech skills programmes.
    • Creating an enabling environment for private sector investment and enhancing collaboration between industry, 
    • Skills development institutes and development partners will promote holistic growth of the fintech ecosystem in India.

About Asian Development Bank:

  • On 30 November 1965, delegates of the United Nations Economic Commission for Asia and the Far East voted for Manila to host the ADB headquarters.
  • From 31 members at its establishment in 1966, ADB has grown to encompass 68 members—of which 49 are from within Asia and the Pacific and 19 outside.
  • It was founded in 1966, it is a multilateral financial institution and has worked in partnership with its developing member countries and development stakeholders to sustain its efforts in eradicating extreme poverty in Asia and the Pacific. 
  • ADB provides an average of more than $30 billion annual assistance to its developing member countries. 
  • ADB engages in mostly public sector lending for development purposes in its developing member countries. ADB’s clients are its member governments, who are also its shareholders.
  • ADB lends to governments for development projects. It has no individual clients.

Beneficial impacts of the agreement:

  • These above interventions will contribute to enhanced employment opportunities, workforce competitiveness, and productivity in new and green technologies.
  • The ADB programme will support research on innovative solutions and technologies in climate fintech, regulatory technology, social inclusion, and gender equality in finance. 
  • The project will help establish a state fintech readiness index and develop new solutions to emerging technologies.

Conclusion:

The agreement between the GoI and ADB to enhance fintech education and innovation at GIFT City is a significant step towards bolstering India's financial services sector. Through the establishment of the International Fintech Institute, the project aims to drive economic growth, promote gender equality, and foster innovation in the fintech ecosystem.

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