STANDARD Chartered has emerged as the front-runner to become the settlement bank for real-time US dollar-denominated trades in India’s newest financial hub, according to sources familiar with the matter.
The Clearing Corp of India, which has been tasked to set up the settlement system, will start testing the new model by January, said the sources, who asked not to be identified as the discussions are private.
Authorities are aiming to roll out the service to April after different bank units in the Gujarat International Finance Tec-City, or GIFT City, have tested the system, they said.
The move is likely to speed up transactions at a time when foreigners are showing greater interest in India and its sovereign bonds are added to global indexes, including those of JPMorgan.
Standard Chartered declined to comment, while Clearing Corporation did not reply to a request seeking comment.
Last year, the Reserve Bank of India started a domestic non-deliverable forward market for derivatives settled in US dollars at the GIFT City. Some foreign banks are already offering derivative products to investors who want exposure to India without necessarily having to set up shop in the country.
Globally, there are efforts underway to make sending money across borders faster and less complicated. Currently, most cross-border transactions rely on a network of correspondent banks, which can make settlements expensive and lead to delays. BLOOMBERG
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