FinTech Incentive Scheme

Last Updated on: 3rd September 2024, 05:01 pm

On February 2nd, 2022, the International Financial Services Centres Authority (IFSCA) issued a notification introducing the “FinTech Incentive Scheme”.

1. Objective of the Scheme:

The primary aim is to propel India’s IFSC into the league of leading International Financial Centers by financially assisting FinTech activities. The scheme specifically targets:

– Indian FinTechs targeting foreign markets.

– Domestic FinTechs aiming to list on IFSCA-recognised exchanges.

– International FinTechs targeting Indian IFSC market access.

– Foreign FinTechs eyeing Indian markets through the Inter-Operable Regulatory Sandbox (IORS) framework.

– Domestic FinTechs looking to expand their business to the IFSC.

2. Duration of the Scheme:

The scheme will be in operation for three years from its official announcement date.

3. Definitions:

The notification elucidates several terms for clarity, such as ‘FinTech’ being technology-driven solutions assisting Financial Institutions, and ‘Regulatory Sandbox’ being an environment allowing limited real customer interactions for testing FinTech solutions.

 4. Eligibility:

To benefit from this scheme, applicants must meet certain criteria:

– If from India, they could be DPIIT-registered startups, companies under the Companies Act 2013, resident individuals, or entities under the purview of regulators like RBI, SEBI, etc.

– If foreign, they should be individuals or entities from FATF compliant nations with a majority (over 51%) non-resident shareholding.

5. Scope:

The scheme grants are designed for those associated with the Authority’s sandbox programs, accelerators, or special collaborations with the Authority.

6. Types of Incentives:

Multiple grants are available, subject to conditions:

– FinTech Start-up Grant: Up to Rs. 15 lacs for startups with innovative FinTech solutions.

– Proof of Concept (PoC) Grant: Up to Rs. 50 lacs for early or mature FEs for conducting a PoC.

– Sandbox Grant: Up to Rs. 30 lacs for developing innovative products or services in a sandbox.

– Green FinTech Grant: Up to Rs. 75 lacs for sustainable finance solutions.

– Accelerator Grant: Up to Rs. 10 lacs for supporting accelerators at the IFSC.

– Listing Support Grant: Up to Rs. 15 lacs for domestic FEs aiming to list on recognized exchanges.

The FinTech Incentive Scheme is an ambitious endeavor by the IFSCA to invigorate the FinTech landscape in India, making it competitive on a global scale. It promises not only to boost domestic enterprises but to attract international entities, thereby fostering innovation, collaboration, and growth in the sector.

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