The government will set up a unified regulator for International Financial Services Centres.

The decision was taken at a meeting of the Union Cabinet on Wednesday.

The International Financial Services Centres Authority Bill, 2019 will be introduced in the Lok Sabha after withdrawal from the Rajya Sabha.

The Cabinet Committee on Economic Affairs (CCEA) has "approved for withdrawing of the International Financial Services Centres Authority, 2019 Bill which was introduced in the Rajya Sabha on February 12, 2019 and pending in the Rajya Sabha and introducing the International Financial Services Centres Authority Bill, 2019 in the Lok Sabha in the ensuing session of the Parliament".

Currently, the banking, capital markets and insurance sectors in IFSC are regulated by multiple regulators -- the RBI, Securities and Exchange Board of India (Sebi), and Insurance Regulatory and Development Authority of India (Irdai).

"The dynamic nature of business in the IFSCs necessitates a high degree of inter-regulatory coordination. It also requires clarifications and frequent amendments in the existing regulations governing financial activities in IFSC," according to an official statement.

The development of financial services and products in IFSCs would require focused and dedicated regulatory interventions. Hence a need is felt for having a unified financial regulator for IFSCs in India to provide world class regulatory environment to financial market participants.

"Further, this would also be essential from an ease of doing business perspective. The unified authority would also provide the much needed impetus to further development of IFSC in India in-sync with the global best practices," it added.

Earlier, the government had approved the proposal for establishment of a unified authority for regulating all financial services through the introduction of the International Financial Services Centres Authority Bill 2019 in Parliament.

Subsequently, the International Financial Services Centres Authority Bill, 2019 was introduced in the Rajya Sabha on February 12, 2019.

"The Lok Sabha Secretariat has now conveyed that this is a Finance Bill under Article 117(1) of the Constitution and that it should be introduced in Lok Sabha accordingly with the recommendation of the President under Article 117(1) and 274(1) of the Constitution," it added.