India and UK hold second financial markets dialogue in London, first face-to-face dialogue since 2017

NEW DELHI- India and the UK held the second meeting of the India-British Financial Markets Dialogue in London today. Both sides welcomed the first face-to-face finance dialogue since 2017.

The dialogue was led by senior officials from India’s Treasury and HM Treasury, with participation from independent Indian and UK regulators including the Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI) and International Financial Services Center Authority (IFSCA). ), Insurance Regulatory and Development Authority of India (IRDAI), the Bank of England and the Financial Conduct Authority.

Delegates from India and the UK exchanged views on issues in their respective areas of competence and ways to work together in evolving areas of financial regulation.

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The dialogue focused on six themes:

(1) Banking

(2) payments and crypto assets,

(3) insurance and reinsurance,

(4) Capital Markets

(5) asset management and

(6) Sustainable Finance.

Following the Government to Government discussion, private sector partners were invited to the discussion, chaired by India-UK Financial Partnership (IUKFP) Co-Chairs Mr Bill Winters and Mr UdayKotak.

At the meeting, UK and Indian participants provided updates on their respective banking sectors and discussed banking trends and emerging vulnerabilities and risks in the sector. Opportunities to expand knowledge about the central bank digital currency (CBDC) through mutual learning were explored. Participants discussed international developments related to cryptoassets and the importance of robust global approaches, as well as progress in delivering the G20 roadmap to improve cross-border payments.

Participants discussed matters related to the insurance sector, including updates from the UK on Solvency II reforms and a consultation on the introduction of an Insurer Regulation Regime (IRR). Indian attendees learned about developments in the regulatory approach to insurance in India to simplify doing business and encourage the entry of new players for deeper insurance penetration.

Participants identified new areas for collaboration, including knowledge-sharing on regulatory frameworks for pension funds (PFs) in respective countries, potential investment opportunities of PFs, and ecosystem development including technology-enabled solutions for social stock exchange. Both sides discussed the possibility of further technical discussions on the effective regulation of ESG rating providers. The commitment to continue collaborating on opportunities offered by GIFT-IFSC across industries including secondary listing capital markets, sustainable finance, fund management and reinsurance was reaffirmed.

Both sides explored the scope to leverage the wealth management industries to encourage more cross-border trade and investment. In addition, sustainable finance was discussed, including the existing cooperation between central banks in the analysis of climate scenarios and stress tests, as well as capacity building and awareness-raising on climate risks and sustainable finance. In addition, possibilities for cooperation in connection with government green bonds would be explored.

Both sides agreed to engage bilaterally in these areas in the coming months with the government-led Sustainable Finance Forum in June to advance green cooperation, followed by the Ministerial Economic and Financial Dialogue (EFD) later in the year.

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Following the discussion between governments, business leaders from the India-UK Financial Partnership (IUKFP) were invited to the discussion. Both governments welcomed the appointment of Mr Bill Winters CBE, Group Chief Executive of Standard Chartered, as the new UK Chair of IUKFP, alongside Mr UdayKotak, Managing Director & CEO of Kotak Mahindra Bank, as Indian Chair. Participants also thanked Mr David Craig for his role as UK leader from 2020 to 2023.

Participants then welcomed IUKFP leaders to present their recommendations on UK-India financial services relations. They welcomed the release of the IUKFP report “Harnessing the power of FinTech and data” and the group’s continued engagement with both governments and regulators on policy development since the last FMD. They welcomed continued cooperation with the UK-India FinTech Joint Working Group to implement the report’s recommendations. Participants then discussed news from the IUKFP working group on equity market connectivity and looked forward to the IUKFP formally presenting its recommendations at a future EFD. They then discussed future IUKFP priorities, including thematic workshops, capacity building, the completion of the cross-border trade and investment workstream, and new potential workstreams on topics such as wealth management and payments.

Financial cooperation is one of the key elements of the 2030 roadmap adopted at the 2021 meeting of the two prime ministers. Both countries agreed that there is significant scope for increased cooperation on financial services between India and the UK and agreed to hold the next financial markets dialogue in India in 2024.

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