Tamil Nadu to set up FinTech city.
The Tamil Nadu government has initiated development of a FinTech city in Chennai by launching a tender to appoint a project management consultant for the 165-crore project.
While a FinTech policy is being developed, the State government hopes to establish an ecosystem in FinTech through the initiative in order to attract domestic and international financial institutions and to transform Chennai into one of the world's main financial services hubs.
It will be created with the necessary supporting infrastructure to house financial institutions such as banks, non-bank financial services, financial business process outsourcing (BPO); regulatory agencies, financial market activities, and training centres.
Additionally, the FinTech city will bolster the work of FinBlue, a FinTech Centre of Excellence based at STPI in Chennai that identifies, fosters, finances, and scales FinTech start-ups. The state government provided 5.75 crore to the federal government.
According to the RFP, Tidco completed a Technoeconomic Feasibility Study and intends to develop the project in three phases using a hub-and-spoke model. The city has been given 112.8 acres by the state government for the project.
Mahesh Ramachandran, General Partner, Pontaq Venture Capital Fund, stated that FinTech city has the potential to transform the State's position as a financial centre by capitalising on the good work being done here by multinational firms.
In May, during a meeting with State Finance Minister Palanivel Thiaga Rajan, Chairman of the CII Southern Region CK Ranganathan stated that Tamil Nadu has a vibrant ecosystem that attracts investment in the banking and financial services sectors and urged the State government to revive the FinTech City project, a long-held dream of Chief Minister MK Stalin.
Rajan announced the establishment of a dedicated 'FinTech Cell' under Guidance - the Tamil Nadu government's key agency for investment promotion and single-window facilitation - to encourage and facilitate investments in FinTech, Global Capability Centers, and Data Centers. The FinTech Cell will be comprised of representatives from Guidance and industry, with the purpose of assisting the State in establishing industry ties and attracting investment.
Tidco, in collaboration with Tamil Nadu Infrastructure Fund Management Corporation Ltd., has established a 500 crore Emerging Sector Seed Fund. According to the Major Industries' Policy Note for 2021-2022, this fund will prioritise investments in developing areas, including FinTech.
Additionally, the Scheme for FinTech Institutions will provide assistance to FinTech enterprises that employ technology to address the credit needs of State entrepreneurs. According to the Policy Note, the maximum financial aid available under the scheme is Rs 10 crore per borrower.