Joint Statement of India-UK 2nd Financial Markets Dialogue

India and the UK held the second meeting of the India-UK Financial Markets Dialogue in London on 19 April, 2023. Both sides welcomed holding the first in-person financial dialogue since 2017.

The Dialogue was led by senior officials from the Indian Ministry of Finance and HM Treasury, with participation from Indian and UK independent regulatory agencies, including the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), International Financial Services Centre 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 shared views on issues in their respective areas of responsibility and possibilities of collaboration in evolving fields of financial regulation.

The Dialogue focused on six themes:

(1) Banking

(2) Payments and Cryptoassets,

(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, led by the co-chairs of the India-UK Financial Partnership (IUKFP), Mr. Bill Winters and Mr. Uday Kotak.

At the meeting, UK and Indian participants provided updates on recent developments in their respective banking sectors, discussing banking trends and emerging vulnerabilities and risks in the sector. Scope for augmenting knowledge on Central Banking Digital Currency (CBDC) through mutual learning was explored. Participants discussed international developments regarding cryptoassets, and the importance of robust global approaches, and progress in delivering the G20 Roadmap for Enhancing Cross-border Payments.

Participants discussed matters relating to the insurance sector, including UK updates on Solvency II reforms and a consultation on the introduction of an Insurer Regulation Regime (IRR). Indian participants updated on developments in the regulatory approach towards insurance in India, in favour of enhancing ease of doing business and encouraging entry of new players for deeper insurance penetration.

Participants identified emerging areas for collaboration including knowledge exchange on regulatory frameworks for pension funds (PFs) in respective countries, potential investment opportunities by PFs and the development of ecosystems including technology-based solutions for Social Stock Exchange. Both sides discussed the possibility for further technical discussion on the effective regulation of ESG rating providers. Commitment to continue collaboration on opportunities offered by GIFT-IFSC across verticals including capital markets for dual listing, sustainable finance, fund management and re-insurance was re-iterated.

Both sides explored the scope to leverage asset management industries in favour of deeper cross border trade and investment. Sustainable Finance was also discussed including existing collaboration between central banks on climate scenario analysis and stress testing, as well as capacity building and spreading awareness on Climate Risk and Sustainable Finance. Moreover, opportunities to collaborate around Sovereign Green Bonds would be explored.

Both sides agreed to engage bilaterally on 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.

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

Participants then welcomed leaders of the IUKFP to present their recommendations on the UK-India financial services relationship. They welcomed the launch of the IUKFP report on ‘Harnessing the power of FinTech and data’ as well as the group’s continued engagement with the two governments and regulators on policy development since the last FMD. They welcomed further engagement with the UK-India FinTech Joint Working Group on implementing the report’s recommendations. Participants then discussed updates from the IUKFP working group on equity capital markets connectivity and looked forward to the IUKFP formally presenting its recommendations at a future EFD. They then discussed future areas of IUKFP focus, including issues-focussed workshops, capacity building, the conclusion of the cross-border trade and investment workstream, and new potential workstreams on topics including asset management and payments.

Financial Cooperation is one of the key elements of the 2030 Roadmap adopted during the 2021 meeting of the two Prime Ministers. Both countries agreed there is significant scope for strengthened financial services cooperation between India and the UK, and agreed to hold the next Financial Markets Dialogue in India in 2024.