In exercise of the power
under section 12 of the International Financial Services Centres
Authority Act, 2019, the International Financial Services Centres Authority
('Authority') hereby notifies the FinTech Incentive Scheme: (1)
The principal objective of the scheme is to promote
the establishment of a world class FinTech Hub, comparable with those located
in advanced International Financial Centers (IFCs) across jurisdictions, at
International Financial Services Centre (IFSC) in India by providing financial
support to FinTech activities in the form of specific grant(s) as specified in
the scheme, based on their eligibility and fulfilment of terms and conditions
as may be specified. (2)
This scheme shall be open to - (a)
Domestic FinTechs seeking access to overseas
markets; (b)
Domestic FinTechs seeking listing on IFSCA
recognised stock exchanges; (c)
Foreign FinTechs seeking market access to IFSCs in
India and work within the Authority's regulatory framework; (d)
Foreign FinTechs seeking access to domestic market
under Inter-Operable Regulatory Sandbox (IORS) framework; (e)
Domestic FinTechs extending business to the IFSCs
either by way of authorisation or registration or through the regulatory
sandbox. (1)
The scheme may be called the International
Financial Services Centres Authority (FinTech Incentive) Scheme, 2022. (2)
This scheme shall come into force on the date of
its publication in the official gazette and shall be operational for an initial
period of three years from the date of commencement. (1)
In this scheme, unless the context otherwise
requires, the terms defined herein shall bear the meaning as assigned to them
below, and their cognate expressions shall be construed accordingly: - (i)
'Act' means the International Financial Services
Centres Authority Act, 2019 (50 of 2019); (ii)
'Accelerator' or 'Cohort' means business programmes
run by companies or incubators that supports early-stage, growth-driven FinTech
companies through education, mentorship, etc.; (iii)
'Applicant' means an eligible Fintech Entity who
makes an application to the Authority for receiving grant under this Scheme; (iv)
'Domestic FinTech Entity' means a resident
individual or an entity incorporated or established in India including in the
IFSCs (for the purpose of this Scheme) and regulated by the Authority under the
appropriate framework or regulations; (v)
'Evaluation Committee' means a committee set up by
the Authority for evaluation and processing of applications made under this
Scheme; (vi)
'Financial Institution' shall have the same meaning
as assigned to it under clause (c) of sub-section (1) of Section 3 of
the Act; (vii)
'FinTech' means a technologically enabled
innovative solution aiding or assisting Financial Institutions in delivery of
Financial Products or Financial Services; (viii)
'FinTech Entity' or 'FE' means a Domestic FinTech
Entity or a Foreign FinTech Entity; (ix)
'Foreign FinTech Entity' means a non-resident
entity from outside India which is regulated by the Authority to undertake
FinTech related activities in the IFSC; (x)
'Incentive' means monetary grant given to the
FinTech Entities under the terms and conditions of this Scheme; (xi)
'Innovation Sandbox' means a testing environment
where FinTech Entities can test their ideas and solutions in isolation from the
live market, which may add value to financial products or financial services
offered in IFSC, based on data made available to them by the Financial
Institutions operating in IFSC; (xii)
'Internal Committee' means the committee
constituted by the Authority for monitoring the end use of grants given under
this Scheme; (xiii)
'International Financial Services Centre' or 'IFSC'
shall have the same meaning as assigned to it under clause (g) of sub-section
(1) of Section 3 of the Act; (xiv) 'Inter-Operable Regulatory Sandbox' or 'IORS' means IORS testing of
innovative hybrid financial products / services falling within the regulatory
ambit of more than one domestic financial sector regulator; (xv)
'Minimum Viable Product' or 'MVP' means a version
of a product with minimum features for providing feedback for future product
development by the early users; (xvi) 'Proof-of-Concept' or 'PoC' means a demonstration of a concept,
principle or idea about its feasibility and potential; (xvii) 'Prototype' means an early sample, model, or release of a product built
to test a concept or process; (xviii)
'Regulatory Sandbox' means a live environment with
a limited set of real customers for a limited timeframe wherein entities
operating in the capital market, banking, insurance and other financial
services space in IFSC shall be granted certain exemptions / relaxations from
applicability of certain regulatory provisions for experimenting FinTech ideas
and solutions. (2)
Words and expressions used and not defined in this
scheme but defined in the applicable Laws, and in particular, under the Act, or
any rules or regulations made thereunder shall have the same meanings
respectively assigned to them in those Acts, rules or regulations or any
statutory modification or re-enactment thereto, as the case may be. (1)
An Applicant, satisfying any of the conditions
mentioned below, shall be eligible to make an application for availing
incentive under this Scheme: (i)
Where the Applicant is from India: (a)
An entity registered with DPIIT (Department for
Promotion of Industry and Internal Trade) as a start-up entity relating to
FinTech; (b)
An entity incorporated as a company under the Companies
Act 2013, or as a Limited liability Partnership (LLP) under the Limited
liability Partnership Act, 2008 or a 'Branch' of an Indian company or LLP in
IFSC; (c)
An Individual who is a resident citizen; or (d)
An entity working directly or indirectly in the
ecosystem regulated by RBI, SEBI, IRDAI or PFRDA. (ii)
Where the Applicant is from Outside India - A
Non-resident Individual or an entity from FATF compliant
countries/jurisdictions; Provided that
where the applicant is a body corporate incorporated outside India, the
shareholding of non- resident Individuals in the applicant, shall, at all
times, be more than 51%. (2)
The Applicant undertakes to use technology in its
core product or service, business model, distribution model or methodology to
solve the problem being targeted. (3)
An entity who has received any grant earlier from
the Central or State Government schemes for the same project scope and
activities shall not be eligible to apply under this Scheme. Provided that the
prize money from competitions and grand-challenges, founder monthly allowance,
etc. shall not be considered as grant received earlier. (4)
Applicant shall be required to submit separate
proposals, in case there is more than one projects or innovative components
each of which fits into the qualifying criteria and they shall be treated as
separate projects and be evaluated and incentivised separately. The Grants
contemplated under this scheme shall be available to eligible FEs: (1)
who are part of the Authority's Regulatory or
Innovative Sandbox; (2)
who participate in the Authority's supported
Accelerators or Cohorts or Special Programs; or (3)
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 for strengthening identified area of
common interest. (1)
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. An eligible
FE may receive up to Rs. 15 lacs under this scheme. The grant is expected to
meet expenses towards product development, manpower costs, IT costs, etc. At
this stage the focus is on converting the idea into an MVP. (2)
Proof of Concept (PoC) grant- This grant shall be
utilized for the purpose of conducting a PoC by an early or mature FE in domestic
market or overseas. An amount of up to Rs. 50 lacs may be provided to an
eligible FE for the purpose of conducting a PoC either in Indian markets or
overseas and shall cover expenses towards manpower costs, IT costs, marketing,
prototyping costs etc. (3)
Sand-box grant- This grant shall be utilized by FEs
to experiment with innovative products or services in a sandbox. An amount of
upto Rs. 30 lacs may be provided to an eligible FE to cover the costs of
developing a software, prototyping, manpower costs, consulting, tech-related,
IT related, admin costs, etc. (4)
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. An amount of up to Rs. 75 lacs of grant may be provided to
an eligible FE focussed on sustainable finance. (5)
Accelerator Grant- This grant shall be utilized for
supporting accelerators at the IFSC. An amount of up to Rs. 10 lacs of grant may
be provided to an eligible Accelerator applicant for capacity building, build
capabilities around mentors, bringing investors, bringing more projects or PoC,
tie ups, etc. (6)
Listing Support Grant - The grant shall be utilized
for supporting Domestic FEs aspiring to go for listing on stock exchanges
recognised by the Authority. An amount of up to Rs. 15 lacs may be provided to
an eligible Domestic FE for meeting expenses pertaining to road shows,
international travel and listing requirements, etc. (1)
Process (i)
The Applicant shall make the application in the
form and manner, containing such particulars and accompanied by such documents
and fees, as may be specified by the Authority. (ii)
On receipt of application, the Authority shall
scrutinize the application and conduct due diligence with respect to
eligibility, compliance with regulatory requirements including KYC-AML
guidelines, disclosure norms, corporate governance norms and any other criteria
as may be specified by the Authority. (iii)
The application shall be evaluated by an Evaluation
Committee which shall submit its recommendation along with comments and
observations, to the Authority. (iv)
The Authority on being satisfied with the
recommendations of the Evaluation Committee, may issue a sanction letter
containing specific terms & conditions of the grant, requiring the FE to
enter into such agreements, with such terms and conditions, as may be specified
by the Authority. (v)
The Internal Committee shall monitor pre and post
disbursement conditions, compliance, end use of grant, progress, milestone
achievements and shall perform any other function as specified by the
Authority. (vi)
Disbursement shall be made subject to the
satisfactory compliance of the terms and conditions mentioned in the sanction
letter and achieving requisite milestones. (2)
Conditions for Sanction of grant. (i)
FE shall need proper authorization and delegation
of power in favour of its representative who shall be interacting with the
Authority. The FE shall ensure compliance with regulatory requirements and be
responsible for all the acts of omission or commission of its representative. (ii)
The FE or its project team or its implementation
team shall operate from IFSC during the sandbox or accelerator period. (iii)
On successful completion of the
Sandbox/accelerator/cohort/special program, the FE shall incorporate an entity
at IFSC and seek registration/license/authorisation etc. under the Act, if
applicable. (iv)
The FE shall undertake not to implement a
successful solution using the grant under this scheme in any other jurisdiction
for a period of 3 years. (v)
If the FE fails to meet any conditions of the
sanction of a grant, the FE shall undertake to return the grant to the
Authority along with simple interest at the rate of 8% per annum. (3)
Disbursement of Grants. (i)
Disbursement of the grant shall be linked to
milestones set for the FE. The milestones shall be decided in consultation with
the Internal Committee. (ii)
The disbursement shall be done on 'reimbursement'
basis after submission of necessary documents, invoices, technical reports,
etc. The Authority shall normally release the disbursement within 30 working
days of submission of all the documents. (iii)
Advance under the scheme may be considered only
under exceptional circumstances. The Authority may
specify detailed guidelines for the implementation of this Scheme. For the purposes
of implementation of this Scheme and matters incidental thereto, the Authority
may specify norms, procedures, processes etc. or issue necessary clarifications
by way of circulars or guidelines or directions.Issue of
Foreign Currency Exchangeable Bonds Scheme, 2008
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