· Monitor and ensure continued compliance with Indian and U.S. regulatory requirements. · Promptly notify NFA or the CFTC of any status changes affecting exemption eligibility (e.g., suspension, regulatory breaches, or ceasing U.S. business). · All U.S. customer business must comply with NSE IFSC regulations as required under the Order.3

Members must: · Submit to U.S. jurisdiction by appointing a U.S. agent for service of process. · Provide access to their books and records in the U.S. to designated regulatory authorities. · Notify the National Futures Association (NFA) before commencing business with U.S. customers.21

· The detailed procedure, required formats, and templates are included in the NSE IFSC trading circular and its annexures. · You can refer directly to the published CFTC Order and the NFA’s registration guidelines for exempt foreign firms.1

· Send a formal request to NSE IFSC for a letter of representation to NFA. · Provide required documentation as specified in relevant annexures (A, B, C).1 · Prepare an “Agency Agreement” appointing a U.S. agent for service of process. · If the member has U.S. affiliates, submit additional representations.2341

· The CFTC recognized that Indian regulatory frameworks governing NSE IFSC members provide a comparable level of customer protection compared to U.S. standards. · Conditions such as licensing, financial requirements, and compliance programs were evaluated before the exemption was granted.1

· The name, address, and contact of the principal (the NSE IFSC member). · The effective date of the agreement. · A statement confirming the agent will act for service of process and communications regarding transactions subject to CFTC jurisdiction.2

· A registered futures commission merchant through whom the foreign entity does business, · A registered futures association (such as the NFA), · Any other person located in the U.S. who regularly acts as agent for service of process (U.S. law firms are commonly accepted), · A U.S. subsidiary or affiliate that is a registered broker-dealer or introducing broker (with evidence of registration and affiliation).2

Yes, you must provide evidence (such as documentation of affiliation and registration) if you appoint your U.S. affiliate as your service agent.

NSE IFSC: For clarifications or submission guidance, contact ifsctradesupport@nseifsc.co.in or nseifsc-bd@nseifsc.co.in, or call +91-79-66743601/02.

· The CFTC (Commodity Futures Trading Commission) grants relief under Regulation 30.10, allowing certain non-U.S. firms (like NSE IFSC members) to act as "exempt FCMs" (Futures Commission Merchants). · It enables NSE IFSC members not registered as FCMs with the CFTC to carry accounts and trade futures and options on behalf of U.S. customers, provided they meet stipulated requirements.1

· NSE IFSC’s Letter of Representation (Annexure A): Confirms the member’s good standing, regulatory compliance, and business activity both in India and the U.S. · Member Firm’s Own Representation (Annexure B): Completed on your firm’s letterhead, providing regulatory status and business details. · Agency Agreement for U.S. Service of Process (Annexure C): Outlines the appointment of an authorized U.S.-based agent to accept legal service on behalf of the member. · Evidence of affiliation (if using a U.S. affiliate registered as an introducing broker or broker-dealer as agent).2341

· Equity Securities including Initial Public Offers (IPOs), Follow-on Public Offers (FPOs), Right Issues, Qualified Institutional Placements (QIPs), Preferential Issues, and Offers for Sale. · Debt Securities including foreign currency bonds, masala bonds (INR-denominated overseas), green/social/sustainable bonds, municipal bonds, sovereign bonds, sustainability-linked bonds, and Medium-Term Notes (MTNs). · Depository Receipts, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs). · Special listing categories such as listing of Special Purpose Acquisition Companies (SPACs).

· Continuous disclosure of material or price-sensitive information. · Submission of quarterly and annual financial results. · Maintaining updated shareholder patterns and details on encumbrances. · Corporate governance compliance including board meetings, auditor reports, and whistleblower mechanisms. · Sustainability reporting as applicable. · Timely disclosure of changes in key personnel such as directors and KMPs.

· Companies with offer sizes up to USD 50 million may be exempt from seeking an observation letter from IFSCA. · This framework offers expedited approval processes, reduced regulatory burden, and flexibility in shareholder and investor structures. · It aims to facilitate high-growth and technology sector companies to list quickly and efficiently.

· Issuers must follow recognized ESG frameworks. · Appointment of independent third-party reviewers (like Second Party Opinion providers or rating agencies) is mandatory to validate bond credentials. · Transparent and ongoing disclosures are required to meet global ESG standards. · These bonds have a dedicated platform on NSE IX called the International Sustainability Exchange (ISX) for enhanced visibility.

· SPACs must raise a minimum of USD 50 million in their IPO. · Sponsors must hold 15-20% of the post-issue paid-up capital. · 100% of IPO proceeds are held in escrow with an independent custodian. · Shareholders voting against a business combination have redemption rights. · A firm timeline (not exceeding 36 months) applies for consummation of business combinations.

· Application and board approval to marketing roadshows generally span 20-24 weeks. · The offer period must be at least one working day but no longer than 10 days. · Pricing mechanisms may be fixed price or book building. · Underwriting and anchor investor disclosure requirements apply.

· Foreign Currency Bonds: HDFC Bank, ICICI Bank, Bank of Baroda, NTPC, Power Finance Corporation, REC, and Indian Railways Finance Corporation. · ESG Bonds: DFCC Bank (Sri Lanka), Adani Renewables, IREDA, REC, Axis Bank, and IIFL Finance. · Masala Bonds: Indian Oil Corporation, Shriram Transport Finance, NTPC, and others.

· Equity Securities including Initial Public Offers (IPOs), Follow-on Public Offers (FPOs), Right Issues, Qualified Institutional Placements (QIPs), Preferential Issues, and Offers for Sale. · Debt Securities including foreign currency bonds, masala bonds (INR-denominated overseas), green/social/sustainable bonds, municipal bonds, sovereign bonds, sustainability-linked bonds, and Medium-Term Notes (MTNs). · Depository Receipts, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs). · Special listing categories such as listing of Special Purpose Acquisition Companies (SPACs).

· Business Development Team (NSE IX): bd@nseix.com, Phone: +91-79-66743615 / 542 · Listing Support: listing@nseix.com, Phone: +91-79-66743533 · Office Address: Unit No.1201, Brigade International Financial Centre, 12th Floor, Block-14, Road 1C, Zone-1, GIFT SEZ, Gandhinagar, Gujarat, India 382355 · Official NSE IX Website: www.nseix.com · Regulatory Documents & Guidelines: Available on IFSCA website and NSE IX portal.

· Book Running Lead Managers (BRLM) · Auditors · Legal Counsel · Sponsor Bank(s) · Credit Rating Agencies (for monitoring usage of proceeds)

· Pre-submission Consultation: Issuers should discuss eligibility, required documentation, and resolve queries with NSE IX’s listing team. · Submission of Documents: Submit application forms, offer documents, listing agreements, undertakings, and other relevant papers. · Exchange Review & Feedback: The NSE IX listing committee reviews submissions and communicates observations or required clarifications. · In-principle Approval: Upon satisfactory review, NSE IX issues in-principle approval, often within one business day. · Final Listing & Admission: Once approved, securities are formally listed and admitted for trading on NSE IX.

· Equity Securities including Initial Public Offers (IPOs), Follow-on Public Offers (FPOs), Right Issues, Qualified Institutional Placements (QIPs), Preferential Issues, and Offers for Sale. · Debt Securities including foreign currency bonds, masala bonds (INR-denominated overseas), green/social/sustainable bonds, municipal bonds, sovereign bonds, sustainability-linked bonds, and Medium-Term Notes (MTNs). · Depository Receipts, Real Estate Investment Trusts (REITs), Infrastructure Investment Trusts (InvITs). · Special listing categories such as listing of Special Purpose Acquisition Companies (SPACs).

· IPV can be done either by the broker’s employee (even if overseas). · Where in-person verification is not feasible, KYC documents can be attested by: · Notary Public, Court, Magistrate, Judge, Local Banker · Indian Embassy or Consulate in the country of residence · Video In-Person Verification (VIPV) may also be used, following regulatory procedures.

· Required: For trading in Debt Securities, Depository Receipts, REITs, and InvITs (as these instruments are in dematerialized form). · Not Required: For trading in all types of futures and options contracts (since these are cash settled).

All trading members and brokers must strictly follow the Prevention of Money Laundering Act (PMLA) guidelines when onboarding NRIs as clients.

· NRIs can remit funds from their overseas bank account to their Trading Member’s bank account in GIFT IFSC. · Upon request, the Trading Member will return funds to the same account from which margins were received.

To open an account, submit these to your NSE IFSC Trading Member/Stock Broker: · Account Opening Form · PAN Card · Valid Indian Passport showing Place of Birth as India and a valid Visa or residence permit (Work/Student/Employment/Resident permit) · One self-certified proof of foreign address: · Passport (address page) · Driving License · Bank Account Statement/Passbook (not older than 2 months) · Utility Bill (landline phone, electricity, or gas, not older than 2 months) · Or another document recognized by the Central Government, with ID number

An NRI is an Indian citizen residing outside India. The term “person resident outside India” follows the definition under the Foreign Exchange Management Act, 1999.

Yes. NRIs are allowed to open bank accounts with International Banking Units (IBUs) at GIFT IFSC to facilitate trading.

NRIs can trade only through trading members registered with NSE IFSC, either via: · Call and trade facility · Internet-based trading, as provided by the trading member For further information or official regulations, refer to: · [NSEIFSC_Regulatory_09.zip] · [NSEIFSC_Regulatory_04.zip] · [NSEIFSC_REG_465.zip] : https://www.nseifsc.com/content/circulars/NSEIFSC_Regulatory_09.zip : https://www.nseifsc.com/content/circulars/NSEIFSC_Regulatory_04.zip : https://www.nseifsc.com/content/circulars/NSEIFSC_REG_465.zip

NRIs are allowed to trade in the following products: · Stock Futures & Options · Index Futures & Options · Currency Futures & Options · Commodities Futures & Options · Debt Securities · Depository Receipts (DRs) of foreign companies · Depository Receipts of Indian companies (only in case of ESOPs) · REITs (Real Estate Investment Trusts) · InvITs (Infrastructure Investment Trusts)

· No Security Transaction Tax (STT) · No Capital Gains Tax (both short-term and long-term) · Nearly 16-hour trading window, overlapping with Asian, European, and U.S. market hours · Lowest trading costs compared to other offshore centers · Guaranteed settlement for all trades · No currency risk (all transactions and settlements in USD)

No, NRIs do not require prior approval to trade in these products on NSE IFSC. However, the trading member or stock broker must upload the Unique Client Code (UCC) of the NRI before trading begins.

· Visit the NSE IX website for detailed guides and updates. · Contact NSE IX via email (bd@nseix.com) or phone (+91-79-66743615 / 542). · Reach out to any registered broker with NSE IX for onboarding assistance and trading support. These FAQs should provide a detailed, point-wise, and easy-to-understand explanation of the features, safeguards, and advantages of trading global stocks on NSE IX through Depository Receipts. If you need more specific assistance or a step-by-step walk-through, NSE IX and its partners are ready to help.

· Access US stocks in USD directly through an Indian regulated platform. · Trade fractional shares (unprecedented in the Indian market). · Investor protection under IFSCA framework. · Guaranteed settlement by NSE IX Clearing Corporation. · Access to corporate actions (dividends, splits, bonuses) on a best-effort basis. · Invest using the LRS (Liberalised Remittance Scheme) facility.

· Trades are settled in USD at GIFT IFSC. · DRs are credited to your demat account at the IFSC Depository (India International Depository IFSC Limited, IIDI). · The underlying US shares are held by US custodians in accounts at DTCC, via HDFC Bank as the IFSC custodian.

· Submit KYC documents and upload the Unique Client Code (UCC) via your broker. · FATCA W-8BEN form (for non-US citizens) is required. · Demat account with the IFSC depository is mandatory. · Funds are remitted from your Indian bank, ensuring transparency.

· Regulated, transparent access to US equities. · Direct investment with legal beneficial ownership and robust protections. · Unique ability to trade fractional shares, available for the first time under the Indian regulatory framework. · All processes—trading, clearing, settlement, and custody—occur within a single, well-regulated ecosystem at GIFT IFSC.

· NSE IX is the only Indian exchange with exemptions from major US regulators (CFTC and SEC) to allow US customers to trade derivatives on its platform. · Offers trading and settlement in US Dollars, making participation seamless for international investors. · Recognized with multiple global awards, reflecting its strong position in the global capital markets.

1. Account Opening: · Open trading and demat accounts with any NSE IX-registered broker. 2. Fund Transfer: · Transfer funds from your Indian bank account to your broker's segregated client account at GIFT IFSC. 3. Trading: · After your funds are credited, place orders via your broker for US stocks (in the form of DRs).

· Trading aligns with US hours as well as additional sessions, overlapping major world markets. · Order books are designed for tight bid/ask spreads to improve liquidity and efficiency for all investors.

· Underlying Company: The US company (e.g., Tesla Inc.). · US Custodian: Holds US shares on instructions from HDFC Bank. · IFSC Custodian (HDFC Bank): Holds legal title to US shares for Indian investors. · IFSC Depository (IIDI): Manages DR creation/cancellation, records holdings, handles corporate actions, and distributes proceeds. · Trading Member/Broker: Registered intermediary who facilitates all transactions for investors.

· Transfer of DRs on IFSC is taxable as per Indian laws. · For Indian residents: · Long-Term Capital Gains (LTCG, holding period ≥36 months): 12.5%. · Short-Term Capital Gains (STCG): As per income slab. · Income from DRs (like dividends) is taxable based on existing slab rates. · Proper disclosure is required in tax returns. Please consult your tax advisor for personalized guidance.

NSE IX DRs · Trades are executed, cleared, and settled on an exchange platform within regulatory oversight. · Investors' holdings are in their own demat accounts—secured and transparent. · All investments benefit from settlement guarantees and the Investor Protection Fund. Unregulated Foreign Platforms · Fractional ownership is often just a book entry with no actual legal claim to US shares. · Ambiguity in ultimate share ownership, safety, and governance. · No direct settlement guarantee or regulatory investor protection.

· Settlement guarantee provided by NSE IX Clearing Corporation. · A dedicated Investor Protection Fund to reimburse investors in case of broker/default-related issues. · All transactions are regulated by IFSCA, ensuring transparency and robust oversight.

· US stocks, in the form of DRs, are traded in both whole and fractional quantities on NSE IX. · Settlement is guaranteed and handled through the exchange infrastructure, not dependent on any single market participant.

· Trading is done through unsponsored depository receipts, which are: · Created without the involvement of the US companies themselves. · Traded exclusively on NSE IX. · Supported by infrastructure involving US custodians, IFSC custodians, and depositories. · You have legal beneficial ownership in the underlying US shares, held for you by HDFC Bank and the IFSC Depository. · All trades, clearing, settlement, and holding occur within the IFSC, in USD.

· Inbound Access: · Debt Securities & Green/Sustainable Bonds (via the ISX Platform) · Single Stock Futures & Options · Equity Index Futures & Options · Currency Futures & Options · Depository Receipts (DRs) · Outbound Access: · US Stocks (via unsponsored Depository Receipts under IFSCA Regulatory Sandbox) · Equity Listings of global companies

· Eligibility for dividends and stock splits is based on the US stock's record date plus one business day at IFSC. · Cash/non-cash corporate action benefits are credited to investors on a fair and reasonable basis. · Voluntary corporate actions (such as tenders) may not be supported.

· NSE IX is the International Exchange arm of the National Stock Exchange of India. · Located at GIFT City IFSC (Gujarat International Finance Tec-City), operational since June 5, 2017. · Its vision is to serve as the preferred gateway for both inbound and outbound investments and hedging for global and Indian investors.

· Tax: 9% withholding tax on interest for debt securities (lower than most international venues). · Cost: Significant savings on listing/regulatory fees; zero annual listing fees. · Process: Simplified, transparent, and quick with dedicated support. · ESG focus: Special platform and visibility for ESG labelled bonds. · Ongoing obligations: NSE IX simplifies ongoing reporting by leveraging parent NSE’s data.

Issuer Testimonials: · IIFL Finance, Axis Bank, HDFC Bank, Indian Oil, and others have highlighted the cost-effectiveness, efficiency, and visibility benefits of listing on NSE IX.

· Foreign Currency Bond Issuers: HDFC Bank, Bank of Baroda, ICICI Bank, REC, NTPC, Power Finance Corporation, Indian Railway Finance Corporation, and more. · ESG Labelled Bonds Issuers: DFCC Bank (Sri Lanka – first foreign corporate green bond), REC, IREDA, Adani Renewables, Axis Bank, IIFL Finance, etc. · Masala Bonds Issuers: Shriram Transport Finance, Indian Oil Corporation, NTPC, others.

NSE IX supports listing of diverse debt instruments: · Foreign currency bonds. · Masala bonds (Indian currency denominated but issued overseas). · Green, social, and sustainable bonds (ESG bonds). · Municipal bonds, supranational bonds, sovereign bonds. · Medium-Term Notes (MTN) and sustainability-linked bonds. · Depository receipts, REITs, and InvITs.

· First foreign corporate green bond: DFCC Bank PLC, Sri Lanka. · Major green/social/sustainability bonds: Power Finance Corporation, Indian Railways, Indian Oil, REC, NTPC, Adani, IREDA, among others. · Bond issues span global currencies and support renewable energy, infrastructure, and sustainable development.

Eligible issuers include: · Companies incorporated in India. · Companies incorporated in a foreign (FATF-compliant) jurisdiction. · Companies incorporated in IFSC. · Supranational, multilateral, or statutory institutions. · Municipalities and statutory bodies. · Entities whose securities are guaranteed by a sovereign (India or foreign). Note: The issuer or director must not be debarred or convicted for economic offences in any jurisdiction where they operate or have raised capital.

· Recognized frameworks: The bond must align with an established ESG/green bond framework. · External review: Issuer must appoint an independent reviewer to validate alignment (Second Party Opinion, Verification, Certification, or ESG rating). · Transparent disclosure: Ongoing and initial disclosures must meet global standards to attract ESG-focused investors.

Contact NSE IX Debt Listing Team: Email: bd@nseix.com Phone: +91-79-66743615 / 542 Unit No.1201, Brigade International Financial Centre, 12th Floor, Block-

· Global investor access: Reach international capital and diversified investor bases. · Multi-currency fundraising: Raise funds in various currencies (e.g., USD, EUR, INR). · Simple, cost-effective ecosystem: Low listing/regulatory fees, no annual listing fees, and efficient processes compared to offshore exchanges. · Tax advantages: 9% withholding tax on interest paid on debt securities. · No minimum market cap: Flexible entry compared to many international exchanges. · ESG exposure: Separate platform for green/social/sustainable bonds for enhanced investor visibility. · Compliance with global standards: Uses IND AS, US GAAP, or IFRS for financial reporting. · Quick turnaround: In-principle approval possible within one business day. · Visibility and credibility: Enhanced issuer profile among global investors.

· Statistics on turnover and open interest across Nifty50 and other products are shared, highlighting the exchange's growing market share and activity. · Market data dissemination ensures transparency and attracts international investors.

Step-by-step: · Pre-submission: Contact the NSE IX listing team for guidance and to resolve queries. · Document submission: Provide application form, agreements, offer documents, undertakings, and other relevant materials. · Review: NSE IX team reviews documents and liaises for any additional information. · Approval letter: NSE IX issues an in-principle approval once all documents are satisfactory. · Admission to trade: Securities are officially listed and admitted for trading.

· Axis Bank Ltd. (IBU) · HDFC Bank Ltd. (IBU) · ICICI Bank (IBU) · IndusInd Bank (IBU) · Kotak Mahindra Bank (IBU) · The Hongkong and Shanghai Banking Corporation Ltd.

SGX India Connect IFSC (SGX-ICI), a subsidiary of SGX in India, routes SGX members’ orders to NSE IX for trade matching. Trades executed this way are cleared simultaneously by NSE IX Clearing Corporation Ltd. and SGX Derivatives Clearing, ensuring robust risk management.

Trading members must assign Unique Client Codes (UCC) to clients and upload these details via the NSE IX web-based portal before clients can begin trading.

Full-scale operations, including the exclusive trading of all USD-denominated Nifty derivatives on NSE IX, commenced on July 3, 2023.

Initially, Futures and Options on the following equity indices are available: · Nifty 50 · Bank Nifty · Nifty IT · Nifty Financial Services

· Exchange Transaction Charges (Futures): Prop Trader – $0.40 per lot; Client – $1.50 per lot · Exchange Transaction Charges (Options): Prop Trader – 0.05% of premium; Client – 0.10% of premium · IFSCA Turnover Fee: 0.00010% of turnover · Stamp Duty, Securities Transaction Tax (STT), and Investor Protection Fund fees are not applicable.

Trading hours (Indian Standard Time): · Pre-Open: 06:15 AM · Regular Trading: 06:30 AM to 02:45 AM (next day) Specific timing details for various products are available on the NSE IX website.

NSE IX – SGX Connect is a collaboration between NSE and the Singapore Exchange (SGX), allowing global investors to trade Nifty contracts via GIFT City. This connect model combines liquidity pools and enables clearing through both NSE IX Clearing Corporation and SGX Derivatives Clearing.

Accepted collateral includes: · Cash · Fixed Deposit Receipts (FDRs) from approved banks · Bank Guarantees (BGs) issued by approved banks · US Treasury Bills (up to 1-year maturity) At least 50% of the liquid assets must be cash.

Foreign entities must: · Be from FATF-compliant jurisdictions. · Be regulated as stockbrokers in their home countries. · Isolate their IFSC operations from overseas operations (financial, compliance, technological). · Obtain registration from the IFSCA before operations. · Locate trading servers within IFSC. · Appoint a designated director/compliance officer locally. · Comply with net worth and capital requirements under IFSCA regulations.

The process includes: 1. Applying for SEBI and IFSCA in-principle approval. 2. Establishing an office/subsidiary at GIFT IFSC. 3. Obtaining approval from the KA-SEZ development commissioner. 4. Remitting funds to create net worth as per requirements. 5. Applying for NSE IX membership via the IFSCA portal.

An EFI is a foreign investor who: · Is not resident in India. · Is not resident in jurisdictions flagged by the Financial Action Task Force (FATF) for AML or terror financing issues. · Is not prohibited from dealing in securities markets in India.

· NEAT Front-End: Default trading system. · Non-NEAT Front-End (NNF): Customizable front-end for members. · Additional platforms include CTCL, Direct Market Access (DMA), Algorithm Trading (ALGO), Internet-Based Trading (IBT), and wireless trading technologies.

NSE IX (NSE International Exchange) is a wholly owned subsidiary of the National Stock Exchange of India Ltd (NSE), established on November 29, 2016. It operates under the regulation of the International Financial Services Centres Authority (IFSCA) and offers USD-denominated trading in various securities from GIFT City, Gujarat.

Compliance calendars, guidelines, and reporting requirements for members are published on the NSE IX website and updated regularly to ensure regulatory adherence.

· Members may colocate trading infrastructure at NSE IX premises to reduce latency. · Multiple registered technology vendors including Independent Service Providers (ISVs), Network Carriers (INCs), Application Service Providers (ASPs), and Colocation Service Providers (CaaS) support members.

· Any Indian or foreign trading member registered or unregistered with their home regulator, operating through a subsidiary or branch at GIFT IFSC. · Non-Resident Indians (NRIs), Foreign Portfolio Investors (FPIs), and Eligible Foreign Investors (EFIs) can trade as clients of NSE IX trading members. · Indian retail investors can invest in US stocks through NSE IX receipts under the Liberalised Remittance Scheme (LRS).

· NRIs require no prior approvals to trade. · Trading members must allocate a Unique Client Code (UCC) to NRIs and submit this to NSE IX before trading begins.

NSE IX also offers: · Single Stock Futures & Options · Equity Index Futures & Options (e.g., GIFT Nifty 50, GIFT Bank Nifty) · Derivatives on Fixed Income instruments · Currency Futures & Options across multiple pairs (e.g., USD-INR, EUR-USD) · Depository Receipts for US and Indian stocks · Bharat Bond Index Futures

They can be warned, fined, suspended, or expelled.

You must apply with forms, fees, and documents. The Exchange reviews your application and may accept or reject it.

Yes, if there’s a conflict, rules or instructions from higher authorities like IFSCA or the Government of India will override IIBX’s rules.

Members must: Follow all rules and regulations. Complete paperwork, provide information, and cooperate with audits. Pay fees and maintain the minimum required financial standards.

If there is any confusion or difficulty, the Exchange has the final right to clarify or decide, and that’s binding on everyone.

The member cannot do new business at IIBX. They must finish existing obligations, and creditors’ rights stay safe.

The Board of Directors runs the Exchange. The Board can make, change, or remove rules and create committees to help manage.

All rights and privileges are lost. Membership is ended and can’t be used anymore. The company is still responsible for its debts and unfinished business.

These rules outline how the IIBX operates, who can trade, how members are admitted or removed, and how disputes are handled.

A company cannot join if: It is facing bankruptcy, insolvency, or winding-up. It has been previously expelled or declared a defaulter. It has legal or regulatory restrictions due to fraud or other offenses.

IIBX stands for India International Bullion Exchange IFSC Limited. It’s a marketplace for trading gold and other precious metals, set up at GIFT City, India.

Mainly companies registered in India under the Companies Act, 2013. Other qualified entities may be allowed by the Exchange. They must meet certain eligibility standards set by authorities.

Generally, no. Membership is not transferable. Exception: If there is a merger, takeover, or restructuring of the company, with approval.

The Board of Directors of IIBX controls and regulates the Clearing Department, with powers to make/amend rules, regulations, and Bye-Laws and to constitute committees as necessary.

It refers to contracts for purchase and sale of bullion, including Bullion Depository Receipts and derivatives, permitted by IFSCA.

Applicants must submit prescribed forms, fees, deposits, undertakings, and documents. The Relevant Authority may admit, refuse, or provisionally admit applicants as per criteria.

BCMs must observe all Rules/Bye-Laws/Regulations, provide returns, information, and undergo inspections/audits as required, and cooperate with IIBX or its authorized persons.

Generally, no. Exceptions (subject to approval) include cases like amalgamations, mergers, demergers, takeovers, or formation of new entities by existing members.

Yes, the Board can constitute statutory and other committees, and delegate powers to them for day-to-day or specific operations.

It is a fund maintained by IIBX to guarantee settlement of trades executed on the Exchange.

A Bullion Clearing Member is an entity admitted and registered with IFSCA to clear and settle deals and contracts on IIBX.

They may be suspended or expelled, and may be declared defaulters for continued non-compliance.

Primarily companies under the Companies Act, 2013, or any other entity as permitted, subject to strict eligibility/“fit and proper” criteria as per IFSCA regulations.

Disqualifications include insolvency, liquidation, bankruptcy, expulsion/defaulter status elsewhere, previous refusal (within a year), restrictions by authorities, fraud convictions, or violations of securities laws.

Members must maintain margin deposits (security for open trades) as specified by IIBX. Margins help cover market risks, and failing to maintain the required level can result in suspension.

The Board of Directors of IIBX’s Bullion Clearing Corporation is responsible for creating, implementing, and amending the Bye-Laws. Final clarifications and interpretations are binding on all participants.

Entities meeting specific financial and regulatory requirements set by IIBX and the IFSCA can become Bullion Clearing Members. This includes companies and eligible foreign entities who maintain adequate financial deposits and comply with regulatory standards.

IIBX uses digital systems to maintain complete and reliable records of all trades, which serve as the official proof in case of disputes.

If a Bullion Clearing Member does not fulfill its financial or delivery obligations, the Bye-Laws allow IIBX to penalize, suspend, or declare the member a defaulter. In such cases, the Settlement Guarantee Fund may be used to cover outstanding obligations.

Yes. The Board can update the Bye-Laws as needed, and all rules are subject to government and regulator (IFSCA) directives, which take priority.

If a clearing member defaults: · Their assets, deposits, and margins are used to cover outstanding obligations. · The process ensures creditors and clients are paid as per priority specified in the Bye-Laws. · The defaulter’s membership is terminated and may face further legal action.

All client, member, and trade information is treated as confidential by IIBX, and can only be disclosed when required by law or regulatory authorities.

Yes. The Board sets up committees as required to manage various aspects of clearing operations, risk management, membership, and other key functions.

All trades (or “Deals”) must be admitted and processed by the Bullion Clearing Corporation, following strict procedures for delivery, payment, and settlement timeframes specified by the relevant authority.

A Bullion Clearing Member is authorized to clear and settle gold and other precious metal trades for themselves and their clients according to IIBX’s rules.

The Clearing Bye-Laws are a set of rules that explain how trading, clearing, and settlement of gold and other precious metal deals are managed at the India International Bullion Exchange (IIBX).

Questions or disputes should be referred to IIBX through the proper channels. The Board has final authority on clarifications regarding the Bye-Laws.

Any disputes or claims between members or between members and clients regarding trades are resolved through arbitration or other dispute resolution mechanisms as prescribed by the IFSCA.

The Settlement Guarantee Fund is a financial reserve maintained by IIBX to guarantee the completion of trades, even if a clearing member defaults. All clearing members contribute to this fund.

A fund contributed to by members to ensure settlement of trades even if a member defaults, maintaining market stability.

Applicants submit an application along with fees and documents. The exchange reviews and approves or rejects the application based on set eligibility requirements.

Disputes among members or between members and clients are resolved through arbitration or other formal dispute resolution as prescribed by the exchange and regulator.

IIBX has a Consumer Education and Protection Fund that compensates clients if a member defaults and compensates consumers for eligible losses.

Trades are conducted electronically on the exchange's trading platform and settled through a clearing corporation, which guarantees trade completion.

Generally, no. Membership cannot be transferred or sold except in special cases such as company mergers or restructuring, subject to exchange approval.

If a member fails to meet obligations like payment or delivery, they may be declared a defaulter, leading to suspension or expulsion. Their assets may be used to settle dues.

The Board of Directors and the Relevant Authority have the final say on clarifications. Members can reach out to IIBX or the designated authorities for guidance

Typically, companies registered under Indian law or eligible foreign entities approved by regulators can become Bullion Trading Members, provided they meet financial and regulatory criteria.

The IIBX Board of Directors oversees the exchange’s operations and can create committees for specific tasks like risk management, member admission, and dispute handling.

Members typically get an opportunity to be heard before dismissal or serious disciplinary actions, ensuring fairness in the process.

Important announcements, changes, or guidelines are issued through official notices called Communiqués, which members must follow.

A Bullion Clearing Member is an entity authorized to clear and settle bullion trades on the exchange, ensuring financial obligations between trading members are met.

All trading and member information is confidential and only disclosed to regulators or courts as legally required.

IIBX is India's dedicated bullion exchange located at the International Financial Services Centre (IFSC), GIFT City, where gold and other precious metals can be traded in a regulated and transparent environment.

Assets are collected by a Defaulters’ Committee and distributed fairly to creditors, including other members and clients, as per rules.

Bye-Laws are the official rules that govern how IIBX operates, including trading, membership, clearing, settlement, risk management, and dispute resolution.

Market Making involves certain members providing continuous buy and sell quotes for bullion contracts to maintain market liquidity, subject to specific requirements.

They must comply with all exchange rules, maintain financial standards, submit regular reports, cooperate with audits, and ensure settlement of trades.

Yes. The Bye-Laws work alongside and are subject to the International Financial Services Centres Authority (IFSCA) regulations and Government of India laws.

· IFSC companies must enter industrial codes 65, 66, or 67. · The registration office (CRC) is advised NOT to raise objections against these codes, recognizing their valid use for IFSC activities.OM_EODB_20250630_1223.pdf

Priority processing: IFSC applications (including name reservations) are now marked as "priority," ensuring faster approval. Requests for such prioritization can be emailed directly to the Registrar of Companies’ CRC office.OM_EODB_20250630_1223.pdf

· Yes, a photograph of the registered office must be attached when filing Form INC-20A (declaration of commencement of business), within 180 days of incorporation. · For Form INC-22 (notifying the registered office address), this photograph is required at the time of first notification or when shifting office. · IFSC companies have 60 days to file INC-22 (vs. 30 days for others), providing extra time for compliance.OM_EODB_20250630_1223.pdf

· All companies being set up in GIFT City’s IFSC, including Indian and foreign companies. · Holding companies and their wholly-owned subsidiaries wishing to have a distinct “IFSC” entity. · Entities seeking ease of incorporation, especially global institutions.OM_EODB_20250630_1223.pdf

· Issues with entering PIN codes for IFSC locations in Form INC-22 have been fixed, making it easier to submit applications electronically.OM_EODB_20250630_1223.pdf

· The holding company’s Corporate Identification Number (CIN) can only be entered once in the incorporation form. · A second (nominee) shareholder must be entered to meet private company requirements. · The holding company still holds the beneficial interest in the nominee’s shares and must comply with Section 89 of the Companies Act, 2013 to declare this beneficial interest.OM_EODB_20250630_1223.pdf

· Normally, registered office details must be provided within 30 days of incorporation. For IFSC companies, this period is extended to 60 days. · At incorporation, only a correspondence address is required. The actual registered office can be confirmed later by filing Form INC-22 within 60 days. · The verification of address is done through a "Straight Through Process" (STP) for quick approval.OM_EODB_20250630_1223.pdf

· IFSC companies can submit a provisional letter for allotment of space and a No Objection Certificate (NOC) from the co-developer of the premises at the time of filing Form INC-22. · These documents suffice under Rule 25 of the Companies (Incorporation) Rules, 2014 for proof of address.OM_EODB_20250630_1223.pdf

IFSC entities should contact the Ministry of Corporate Affairs (MCA) or the O/o CRC as specified, using the official email addresses and contacts provided in the memorandum.

· No. At the time of incorporation, only the correspondence address is mandatory. · The registered office can be notified later within 60 days, providing operational flexibility to IFSC companies.OM_EODB_20250630_1223.pdf

· Faster and prioritized processing of incorporation. · Eased documentation requirements and relaxed timelines. · Clarity and flexibility regarding naming, shareholding, and office leases. · Streamlined compliance and reduction of procedural bottlenecks.

· When a company wants to establish a subsidiary in IFSC and the only name change is the addition of "IFSC," the application must include a No Objection Certificate (NOC) from the parent company. · This NOC will help ensure smooth approval by the authority.OM_EODB_20250630_1223.pdf

The key goal is to make it easier and faster to incorporate companies at the International Financial Services Centre (IFSC), specifically in the GIFT City, Gujarat. The guidelines remove procedural delays, clarify documentation, and provide special benefits for IFSC entities.OM_EODB_20250630_1223.pdf

· Allowing foreign law for Indian parties. · Allowing foreign lawyers/judges as arbitrators, mediators, and judicial officers. · Recognition of third-party funding, with appropriate regulation and disclosures. · Case management tools and online technology for efficient filings and conduct of proceedings. · Availability of multi-lingual awards and non-English proceedings.

· The ADRC will handle commercial, financial, and even hybrid disputes arising from both contracts within IFSC and, potentially, transactions worldwide if parties select the centre. · Parties can include Indian and foreign corporations, financial institutions, public sector undertakings, and government departments.

· IFSCA will initiate the setup of the ADRC, establish its secretariat, and work on required legal amendments. · Formation of international advisory and executive councils; strong focus on institutional branding and global outreach. · Collaboration with government and judiciary for effective dispute resolution tools. · Development of public databases to track case progress, professional rosters, and support training and research in ADR.

· Efficient dispute resolution is key for the success, stability, and credibility of any global financial centre. · International business parties prefer forums with effective contract enforcement, quick outcomes, and familiarity with international laws and procedures. · India’s growing role as a global economic hub and the increase in cross-border disputes call for a dedicated ADR centre meeting global standards, cutting down on court delays and giving parties autonomy.

· The design does not simply replicate Indian or global models but combines the strengths of each to suit GIFT IFSC’s unique requirements. · Party autonomy, flexible choice of law (including foreign law for Indian parties), expedited timelines, technology integration (including ODR), and a hybrid ADR approach are key focus areas. · The IAC is intended to be a not-for-profit, independent institution with its own rules and professional code of conduct.

· Expedited Timelines: Strict adherence to timeframes for each stage of case management; shortened limits for filing award challenges and court decisions. · Documents-only Proceedings: Parties can opt for challenge and enforcement proceedings based solely on written submission, avoiding drawn-out oral hearings. · Party Autonomy: Parties can freely choose arbitrators, law of contract, and place of arbitration—even foreign laws for Indian parties. · Technology Integration: Extensive use of digital tools, virtual hearings, ODR, electronic filings, and multilingual awards.

· The committee recommends creating the Alternative Dispute Resolution Centre (ADRC) at GIFT IFSC, offering more than just arbitration—a full suite of ADR services (arbitration, mediation, hybrid methods, online/assisted, etc.). · The framework melds Indian statutes (with modifications) with best global practices.

· The ADRC will be set up as a not-for-profit Section 8 company, with shareholding restricted to institutions (not individuals) and limits to prevent conflicts of interest. · Its governance structure includes: · A Board of Directors (overall direction) · An International Advisory Council (global experts) · An Executive Council (procedural oversight) · A Secretariat (day-to-day administration) · The ADRC is autonomous in rulemaking, operations, and panel management.

· No mandatory accreditation or grading for neutrals—panelists are chosen for expertise and reputation, upholding party choice and flexibility. · The ADRC will maintain a database of professionals; appointments can be made on request or by parties directly. · All neutrals must sign and follow a professional Code of Ethics.

· Amendments to the IFSCA Act, Arbitration and Conciliation Act (A&C Act), Mediation Act, and SEZ Act are suggested to grant IFSCA authority over dispute resolution services at IFSC. · These amendments would: · Allow parties (including Indian companies) broader freedom in choosing governing law for contracts and arbitration. · Bring all arbitrations at IFSC under the international commercial arbitration category, regardless of party nationality. · Enable expedited document-based proceedings and limit court intervention mainly to a designated High Court bench. · Recognize and regulate third-party funding (TPF) for claims.

· Disputes relating to arbitrations at IFSC will be heard in a specially designated bench of the Gujarat High Court. · The committee envisions (in the medium-to-long term) a dedicated IFSC International Court, with international judges for complex cases. · The judicial process is designed for minimal intervention, rapid decision-making, and finality (with limited appeal paths, i.e., direct recourse to the Supreme Court on special leave).

The IAC aims to provide a world-class dispute resolution mechanism for international and domestic commercial and financial disputes arising in GIFT City’s International Financial Services Centre (IFSC). · It is designed to attract global investors and businesses by ensuring that disputes are settled swiftly, fairly, and in alignment with international best practices. · The Centre will offer not only arbitration but also a wider set of Alternative Dispute Resolution (ADR) services, including mediation.

· Awards from the ADRC have expedited enforcement via the designated High Court bench, with detailed case management rules. · Special officers (registrars, bailiffs) and cost provisions to deter delays and ensure compliance.

The circular was issued by the Chief General Manager of the Division of AML & CFT, International Financial Services Centres Authority, in June 2025.

City council tax receipts are no longer accepted as a proof of address. If a customer gives documents (other than a bank or post office savings account statement) as a limited proof of address, the customer must submit an updated Officially Valid Document (OVD) with their current address within three months. Explanation: Bank or post office account statements (including those from foreign banks) can be used as proof of address only for certain customers where simplified KYC measures apply.

· All Regulated Entities operating in the International Financial Services Centres (IFSC), such as banks, payment service providers, finance companies, broker dealers, bullion trading/clearing members, clearing members, depositary participants, investment advisors, fund managers, and insurance companies.

· This circular announces modifications to the International Financial Services Centres Authority (Anti Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022. · It incorporates recent amendments made to the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005, as updated in July 2024.

The requirements apply to: · Payment Service Providers · Finance Companies (core activities) · IFSC Banking Units · Bullion Trading/Clearing Members · Broker Dealers · Clearing Members · Depositary Participants · Investment Advisors · Fund Management Entities · General and Life Insurance companies

When new or updated information is collected: · Regulated Entities must submit this update to the CKYCR within seven days (or as notified). · CKYCR will electronically inform all regulated entities who have previously dealt with the customer. · These entities must then retrieve the updated records from CKYCR and keep their own files current.

Submission of KYC records to CKYCR is mandatory for Indian nationals, as per Rule 9A. · For foreign nationals, submission to CKYCR is not required, but if done, the following are accepted as proof of address: · Documents from government agencies of the foreign country · Letters from foreign embassies or missions in India Alongside that, one of the following must be provided for authentication: · Passport · Driving License · Voter Identity Card

When customers provide alternative proof of address under special circumstances, an updated OVD must be supplied within three months. If a regulated entity finds any data outdated, missing, or inconsistent with norms, it can request updated information or documents.

The full circular and legal references are available on the official IFSCA website at: https://ifsca.gov.in/Legal/Index/TCce8MyOmco=

All other provisions of the original IFSCA (AML/CFT/KYC) Guidelines, 2022, stay in effect unless specifically modified by this circular.

Regulated Entities must now: · Obtain or retrieve the customer’s KYC Identifier from the Central KYC Records Registry (CKYCR), when available. · Download KYC records using the identifier and cannot ask customers for the same KYC documents again unless: · The customer’s information has changed, · The downloaded record is incomplete or doesn’t meet current KYC standards, · The validity of the downloaded documents has expired, · Additional verification is required for risk management or due diligence.

· GIFT IFSC can act as a gateway for channeling large-scale international and domestic capital into India’s climate and transition finance market. · It offers an enabling regulatory environment, a base for innovative financial products, and a platform for blended and cross-border finance.

Green Finance Transition Finance Funds only zero or near-zero carbon projects Funds projects in high-emission sectors to reduce emissions Examples: Solar, wind, battery storage Examples: Steel, cement, shipping using cleaner technologies Paris-aligned projects only Projects on pathway to net-zero (but not yet fully "green") · Transition finance supports companies and activities that are “becoming green” but aren’t there yet.

Introduce or strengthen policies that incentivize decarbonization by: · Setting sector-specific decarbonization targets and roadmaps. · Providing direct public funding and subsidies for demonstration and commercialization of new technologies. · Implementing carbon pricing, tax credits, or lower taxes for green investments. · Requiring or encouraging climate and ESG risk disclosures by corporates and financial institutions.

· Permit transition finance instruments to comply with global taxonomies—until India develops a national taxonomy. · Provide tax incentives for borrowers/investee companies (e.g., reduced withholding tax for foreign investors). · Allow External Commercial Borrowings (ECB) for transition finance under the Automatic Route, relaxing end-use and maturity restrictions. · Encourage Green FinTech in GIFT IFSC offering ESG/transition expertise, registries, and assurance services. · Promote blended finance by involving public sector entities (like IREDA, PFC) to offer guarantees or invest in high-risk projects.

· Industrial sectors like steel, cement, aviation, shipping, chemicals, real estate, and energy—especially those facing technical and financial challenges to decarbonize. · Investors and financial institutions seeking to support climate-aligned change while managing risk in sectors crucial to economic growth.

The report was prepared by an Expert Committee constituted by the International Financial Services Centres Authority (IFSCA). · Its main goal is to create a framework for "transition finance"—financing activities that help move high-emission sectors, like steel or cement, toward lower-carbon and net-zero operations in alignment with climate goals. · The report aims to make GIFT City’s IFSC a hub for international climate and transition finance.

· List major emitting sectors directly (rather than a complex labelling system): Sectors responsible for over 90% of India's emissions (e.g., as recognized in government reports). · Allow use of internationally accepted taxonomies and roadmaps (e.g., EU, Japan, ASEAN) until India finalizes its own. · Align with Paris Agreement targets: Either 1.5°C or well below 2.0°C, offering flexibility for companies at different stages in their transition. · Require credible and science-based transition plans with measurable milestones. · Use third-party assurance for verification to avoid “greenwashing.”

· Achieving India’s net-zero emissions target by 2070 requires over USD 10 trillion in investment. · Most green finance currently supports sectors that are already low-carbon. Transition finance is needed for hard-to-abate and carbon-intensive sectors. · Mobilizing both domestic and international private capital is essential for decarbonizing these challenging sectors.

· Debt: Transition Bonds, Sustainability-Linked Bonds (SLBs), Convertible Transition Bonds/Loans · Equity: Private equity, Alternate Investment Funds, Venture Capital · Hybrid: Sustainability-Linked Loans (SLLs), Derivatives (SLDs), Blended finance structures (combining public and private capital), Carbon credits · Risk mitigation tools: Guarantees, credit insurance, partial credit guarantees, blended finance involving public/private/philanthropic capital · Trade finance: Letters of Credit, bank guarantees, purchase order finance for importing/exporting transition technologies

· Use of blended finance (mixing concessional and commercial capital) to reduce investor risk and improve returns. · Carbon contracts for difference (CCfD) to support high-risk, high-impact decarbonization projects. · Results-based carbon transition bonds, where part of coupon repayments is made using carbon credits earned by verified emission reductions. · Allowing flexibility to use global frameworks (e.g., ICMA, CBI, LMA) while developing an Indian taxonomy.

The full expert committee report and related materials are available on the official IFSCA website. Additional case studies and international frameworks are listed in the report’s appendices.

· Robust, science-based transition plans with clear, measurable milestones. · External, third-party verification and assurance. · Enhanced ESG/climate reporting and transparency requirements for issuers and participants. · Careful use of labels and transparency around the use of proceeds versus outcome-linked instruments.

· Eligible individuals enroll online (as the onboarding process aims for full digital support). · Payment can be via bank transfer, salary deduction, or permitted international remittances (LRS). · Both self-employed and employed individuals working abroad can join. Group enrollments via employers are possible.

· Many NRIs and global citizens face challenges in building secure retirement savings across different countries due to varying rules, lack of portability, and tax inefficiencies. · India’s growing diaspora (over 32 million globally) often cannot carry social security benefits from one country to another or faces double taxation. · There is increasing demand for flexible, internationally portable, non-INR-denominated pension solutions that can adapt to global worker mobility.

· The Government of India should provide legal exemptions for foreign asset investment by GIFT IFSC pension funds. · Proactive pursuit of totalisation agreements with key global economies. · Regulations and product rules to be finalized and notified by IFSCA. · Industry-wide awareness, capacity building, and cross-border collaborations to be initiated.

PPPs must offer: · Financial literacy tools, retirement calculators, and investment simulators. · Clear explanations—in simple language—of risks, fees, options, and investment outcomes. · Multiple-language support and help desks for ease of use by global participants.

· Pension funds are fully portable across borders—so if subscribers change jobs/countries, they can keep contributing or withdraw as per scheme rules. · The report strongly encourages international “totalisation agreements” (pension portability treaties) with countries like the US, UK, etc.

· Only regulated and approved entities under IFSCA ("Pension Product Providers," or PPPs) can launch these pension products. · PPPs must follow: · Stringent compliance, audit, and disclosure norms. · Strong participant rights, grievance redressal forums, and advisory mechanisms. · Clear rules on fund management, reporting, and communication with clients. · Periodic review of products and regulations to align with market changes and best practices.

· A voluntary Defined Contribution (DC) plan denominated primarily in US Dollars (USD) but potentially in other currencies later. · Individuals contribute voluntarily; benefits at retirement depend on accumulated contributions and investment returns (not fixed payouts). · The plan offers flexibility in contributions, investment options, and withdrawals.

· Fees (such as annual management charges) are capped and disclosed up front. · The product stresses low-fee, simple structures to maximize value for savers. · Detailed account statements, online access, and regular communications are required.

Proposed tax benefits include: · Allowing contributions as a deduction under Section 80C (up to ₹1,50,000) in India’s Income Tax Act, available across both old and new regimes. · No tax on interest, dividends, or capital appreciation during the contribution or accumulation phase. · No tax on withdrawals (lump sum or annuity) at retirement. · Grandfathering: In case an NRI becomes an Indian resident later, previously accumulated benefits remain tax-free. · Tax exemption is also proposed for the income earned by Pension Scheme/Trust itself. Note: These are recommendations—the government must approve and formalize the tax schemes.

Participants can choose from a mix of: · Global and domestic equity funds (including index, balanced, and targeted funds) · Debt funds and bonds · Gold and commodity funds · There is a “default investment option” with automatic asset allocation for participants not actively managing their investments (lifecycle or balanced funds).

· Withdrawals can be partial (for emergencies, education, etc.) or full at retirement. · SWP and annuity options allow income phase customization. · Loans may be allowed, typically up to 50% of accumulated value (subject to scheme rules). · Policies on fund transfers between providers and portability across countries are built in.

· Visit the official IFSCA website and keep watch for new regulations and product launches from authorized Pension Product Providers. · NRIs, OCIs, and expatriates should consult their local tax advisor and financial planner to coordinate participation and maximize benefits.

· Non-Resident Indians (NRIs) living and working abroad · Overseas Citizens of India (OCI) · Persons of Indian Origin (PIO) · Foreign nationals employed in GIFT IFSC · Resident individuals abroad seeking to contribute via the Liberalised Remittance Scheme (LRS) Indian residents and corporate/institutional investors are not eligible for these specific products.

· The report reviews successful global models like Singapore’s Supplementary Retirement Scheme (SRS), Dubai’s Employee Workplace Savings Plan (DEWS), and U.S. 401(k)/IRA plans. · Focus is on flexibility, digital administration, transparency, tax efficiency, robust governance, and member education.

· The report is produced by an Expert Committee set up by the International Financial Services Centres Authority (IFSCA). · It aims to explore, design, and recommend pension products—especially for Non-Resident Indians (NRIs), foreign nationals in IFSC, and global citizens—via the Gujarat International Finance Tec-City (GIFT IFSC). · It outlines proposals for regulatory frameworks, product features, distribution, portability, and taxation related to these pension solutions.

During Accumulation Phase: · Open to eligible NRIs, OCIs, PIOs, and foreign nationals working at GIFT IFSC. · Flexible contribution amounts: · Minimum $10 per contribution (example: optional, subject to scheme details) · No maximum limit · Wide investment choices: · Equity (shares, mutual funds, ETFs) · Debt (bonds, fixed income) · Commodities (gold, silver via ETFs) · Diversified portfolios designed for different risk levels. · Easy onboarding with robust KYC and Anti-Money Laundering (AML) checks. During Decumulation (Retirement) Phase: · Multiple withdrawal options—full lump sum, phased withdrawals (Systematic Withdrawal Plan – SWP), annuity products, or a mix. · Freedom to choose timing and frequency of withdrawals. · Option for annuity income (guaranteed, indexed, variable, or joint life).

· The circular informs all bullion market participants about recent amendments to the ITC (HS) codes governing the import of gold and silver through the India International Bullion Exchange (IIBX). · These changes are being made in response to DGFT Notification No. 08/2025-26, which updates import policy codes to align with the Finance Act, 2025.

The circular is issued by the Department of Metals and Commodities, IFSCA, under the authority given by the International Financial Services Centres Authority Act, 2019.

The circular is addressed to: · Bullion Exchange, Clearing Corporation, Depository, and Intermediaries in IFSC (GIFT City) · Vault Managers in IFSC · RBI-authorized banks for bullion imports · All IIBX market participants · Entities holding TRQ (Tariff Rate Quota) under the India-UAE CEPA

· All market participants must now use the updated ITC(HS) codes when importing gold or silver through IIBX. · Both Qualified Jewellers and Indian Banks gain additional flexibility for importing in forms of bars and grains, as per revised codes. · Import of silver bars under "71069221" is now "free" (subject to RBI norms) for all entities.

Only the specified clauses in the referenced circulars are changed; all other provisions remain unchanged and continue to apply.

(A) For Qualified Jewellers · References to "71081200" (old gold bar code) are deleted. · "71069220" (old silver bar code) is replaced with "71069221". · In certain provisions, "71069110" is replaced with "71069120" (silver grains). · Additional permissions: · Qualified Jewellers notified by IFSCA can import gold under "71081210". · Qualified Jewellers can now import silver grains (99.9%+ purity) under "71069120". · Import of silver bars under "71069221" is allowed for all entities (not just Qualified Jewellers), subject to RBI regulations. (B) For India-UAE TRQ Holders · Reference to "71081200" now replaced with "71081210" for gold imports through IIBX under the UAE CEPA TRQ scheme. (C) For Indian Banks · SCC Banks are permitted to import via IIBX: · Gold bars (99.5%+ purity) under "71081210". · Silver grains (99.9%+ purity) under "71069120". · Silver bars under "71069221".

These amendments are effective immediately from June 2, 2025.

· Ensure all documentation and import applications reflect the new ITC(HS) codes as specified. · Review affected processes, coordinate with customs, banks, and counterparts to avoid delays or compliance issues. · Stay updated with notifications from DGFT, RBI, and IFSCA for any future amendments.

· ITC(HS) codes are unique identifiers used in India’s Import Policy to classify goods for import/export (like gold and silver). · Accurate ITC(HS) codes are required to ensure compliance with customs, DGFT, IFSCA, and RBI regulations during imports.

· The circular is published on the IFSCA website under "Legal → Circulars." · For specific queries, the General Manager, Department of Metals and Commodities, IFSCA, can be contacted at the details listed in the circular.

· Booked in IFSC: Transaction recorded in the books of an IFSC entity. · Credit Derivatives Contract: Linked to bonds listed in IFSC/foreign exchanges or held in India by IFSC FPIs. · Equity Derivatives Contract: Linked to shares or equity-related derivatives listed in IFSC/foreign exchanges or held by FPIs in India. · Foreign Jurisdiction: Country with a regulated securities market (IOSCO MMoU signatory) and not blacklisted by FATF. · OTC Derivatives Contract: Any derivatives contract not traded on a recognized IFSC exchange. · Trade Repository: A regulated entity maintaining records of Specified Derivatives Contracts. · Non-Centrally Cleared Derivatives Contract: Not cleared by a recognized clearing corporation.

· Mandatory Central Clearing: Every Specified Person must ensure the contract is cleared by a recognized clearing corporation within one business day. · No bilateral (non-centrally cleared) settlement unless specifically provided and with extra risk controls (public feedback sought on this). · This ensures lower counterparty risk and operational concentration.

· OTC (Over-the-Counter) derivatives are private contracts not traded on an exchange, often used for risk management or investment strategies. · Under current IFSCA rules: · Permitted asset classes for OTC derivatives: Foreign Exchange, Interest Rates, Credit · Only IFSC Banking Units (IBUs) can act as market makers. · Offshore Derivative Instruments (ODIs) are issued by IFSC-regulated entities holding Indian bonds or government securities.

· All Specified Persons must promptly report every contract to a Trade Repository in a prescribed format. · If the contract is issued by an SEBI-registered FPI with Indian securities as underlying, it must also be reported to SEBI as per SEBI timelines. · The reporting must be done on the same day the transaction is executed.

· These new guidelines are meant to come into force after the final version is published, reflecting public comments and IFSCA approval. · Immediate action: Review, suggest changes, and prepare for compliance once the framework is formally in effect

· Market Infrastructure Institutions (MIIs): · Stock Exchanges · Clearing Corporations · Depository · Capital Market Intermediaries (CMIs): · Broker-Dealers · Clearing Members · Depository Participants · Investment Advisors · Custodians · Investment Bankers · Debenture Trustees · Distributors

· All Specified Persons must promptly report every contract to a Trade Repository in a prescribed format. · If the contract is issued by an SEBI-registered FPI with Indian securities as underlying, it must also be reported to SEBI as per SEBI timelines. · The reporting must be done on the same day the transaction is executed.

At present, OTC derivatives in IFSC must involve at least one IFSC Banking Unit (IBU) as a counterparty. For ODIs, the issuing IBU must also be registered with SEBI as a Foreign Portfolio Investor (FPI). A recent circular allows non-bank entities in GIFT-IFSC to issue derivatives against Indian securities, subject to SEBI and IFSCA compliance and monthly reporting to Clearing Corporations.

· OTC derivatives cannot be issued on IFSC-listed or regulated foreign securities except as specified in these guidelines. · Residents of India can’t access these products unless specifically permitted by the authority.

· Review the draft guidelines in detail. · Send feedback or suggestions (with rationale) by August 05, 2025, in the prescribed format to the contacts given in the document. · Include: Name, Designation, Contact Info, Organization, Relevant Guidelines Paragraph, Original Text, Suggested Modification, and Detailed Rationale. Public engagement is strongly encouraged to ensure the final framework meets market and regulatory needs.

Contact: · Shri Praveen Kamat, General Manager, Capital Markets (praveen.kamat@ifsca.gov.in) · Shri Shubham Goyal, Assistant General Manager (goyal.shubham@ifsca.gov.in) · Subject line for emails: “Comments on draft IFSCA (Reporting and Clearing of OTC Derivatives Contracts) Guidelines, 2025”

Trading offered in: · Equity Index Derivatives · Currency Derivatives · Commodity Derivatives · Bonds (corporate, green, masala, sustainable, etc.) · Depository Receipts · Transactions are listed and settled in US Dollars, and non-resident trades enjoy exemptions from capital gains tax and securities transaction tax.

Yes, Broker-dealers and other non-bank entities involved will be subject to additional net worth requirements as specified by IFSCA. "Net worth" follows the definition under the registration/authorization regulation by IFSCA.

The new framework proposes: · Allowing specified OTC derivatives (forwards, total return swaps, etc.) on: · Equities listed on IFSC or regulated foreign stock exchanges · Bonds listed on IFSC or regulated foreign stock exchanges · Index, equity, and bond derivatives listed on regulated foreign stock exchanges · Only IFSCA-registered IBUs and Broker-Dealers may initially issue OTC derivatives; the report seeks feedback on expanding this list. 7. What are “Specified Derivatives Contracts” and who can issue them? Specified Derivatives Contracts: OTC derivatives in credit or equity, including contracts linked to equities or bonds listed in IFSC or on regulated foreign markets. Eligible issuers (“Specified Persons”): · IFSC Banking Units (IBUs) · Broker-Dealers · Other IFSCA-permitted entities (in the future, as per feedback) Note: At least one party to each contract must be a Specified Person based in IFSC.

· All Specified Persons must promptly report every contract to a Trade Repository in a prescribed format. · If the contract is issued by an SEBI-registered FPI with Indian securities as underlying, it must also be reported to SEBI as per SEBI timelines. · The reporting must be done on the same day the transaction is executed.

This consultation paper proposes a new regulatory framework for the reporting and clearing of OTC derivatives in the International Financial Services Centre (IFSC) at GIFT City. The goal is to expand and organize the OTC derivatives market, complement the exchange-traded derivatives segment, and invite public feedback on proposed guidelines.

· Every contract must have a direct one-to-one correspondence with the actual underlying security. · The Specified Person must actually hold the underlying security or have an offsetting position in that security. · "Netting" across contracts and underlying is not allowed—positions must not be offset for exposure calculation. · Both counterparties must submit trade details to the Trade Repository.

· The NRC shortlists 3-5 candidates and obtains consent. · The NRC evaluates candidates per the skill matrix and recommends in order to the Governing Board. · The Governing Board conducts its own evaluation, may reorder or request replacement. · The Board nominates at least two candidates to IFSCA with full profiles and assessment. · IFSCA approves one or requests substitutes; may appoint Nominee Directors if not satisfied. · Once approved, MII completes formalities within 30 days, including shareholder approvals. · The process is designed to be transparent, merit-based, and rigorous.

Regulation states that the number of PIDs must be at least equal to the number of Non-Independent Directors (NIDs). Additionally, the Chairperson of the Governing Board must be a PID, ensuring leadership aligned with public interest. NIDs are usually nominees from parent MIIs or major stakeholders and commonly experts in technology, finance, or management.

· Strengthen investor confidence in MIIs. · Ensure boards have diverse and relevant expertise for better oversight. · Clarify and standardize appointment processes and expectations. · Promote high governance standards in a globally competitive financial center. · Equip boards and PIDs to manage technological innovations and regulatory complexities effectively.

IFSCA invites comments on: · Process and criteria for PID appointments, · Skill-set requirements, · Evaluation metrics, · Knowledge and training mandates. Comments should be sent by August 2, 2025, with references to specific paragraphs and rationale, to the designated IFSCA contacts: · Shri Praveen S Kamat (praveen.kamat@ifsca.gov.in) · Shri Shubham Goyal (goyal.shubham@ifsca.gov.in) · Shri Priyansh Raj Purohit (priyansh.purohit@ifsca.gov.in)

The board collectively must cover at least six key areas: 1. Technology 2. Finance and Accounts 3. Legal and Regulatory 4. Risk Management 5. Capital Markets 6. Management/Administration · For PIDs, at least one must have dominant expertise in: · Technology · Legal & Regulatory · Finance & Accounts · Capital Markets

· MII must apply to IFSCA at least 2 months before term expiry. · Application must consider: · Board skill diversity · PID’s prior performance based on attendance, participation, evaluation policy · The outgoing PID may continue up to 3 months beyond term expiry if no replacement is appointed on time.

PIDs are independent directors appointed to represent the interest of investors and market participants in the securities market in IFSC. They must have no conflict of interest with MIIs or other market entities. Their presence ensures that the MIIs stay focused on safety, transparency, and integrity, benefitting the entire ecosystem.

IFSCA proposes a skill-based evaluation matrix with five weighted criteria, each 20% of the overall score: Criteria Details Value Assessment Ethics, independence, integrity, communication, availability General Competencies Qualifications, leadership, governance experience Domain Expertise Specialized skills in technology, legal, finance, markets Role Synergy Prior board experience, committee participation Board Alignment Fit with MII’s skill gap and strategic needs

Currently, many PIDs have primarily administration/management experience, but MIIs need directors with expertise in: · Technology (e.g., fintech, cybersecurity, blockchain) · Finance & Accounts · Legal and Regulatory matters · Capital Markets · Risk Management Global exchanges such as NASDAQ and LSE emphasize diverse, expert boards to meet complex operational and regulatory challenges; IFSC MIIs need to align with those best practices.

· MIIs operate in fast-evolving financial markets, with technology and regulatory environments changing rapidly. · PIDs must stay current on capital market trends, fintech, cyber risks, and compliance to be effective. · MIIs are encouraged to organize annual training programs, collaborating with reputed institutions. · Training ensures PIDs contribute optimally and uphold market integrity.

The paper seeks public comments and views to refine the process and criteria for appointing Public Interest Directors (PIDs) on the governing boards of Market Infrastructure Institutions (MIIs) operating in the I It aims to ensure robust governance balancing the commercial objectives and regulatory oversight roles of MIIs, enhancing market confidence and integrity especially in a globalized financial center like IFSC.

MIIs such as Stock Exchanges, Clearing Corporations, and Depositories provide the critical infrastructure for: · Trading securities and derivatives, · Clearing and settlement, · Record keeping across market participants. · They play dual roles, pursuing profit like corporates and enforcing regulations, preventing market abuse. · Because of this dual role, governance must be strong, and Public Interest Directors serve as an independent check protecting investor interests.

The broad four-step process includes: 1. Recommendation by Nomination & Remuneration Committee (NRC): NRC identifies and evaluates candidates based on qualifications and relevant skill sets. 2. Independent Governing Board Evaluation: The board further vets and approves candidates, with authority to ask for new recommendations if unsatisfied. 3. Shareholder Approval: Appointment is finalized with shareholder consent. 4. IFSCA Approval: IFSCA reviews and approves or may ask for alternative candidates; can itself appoint Nominee Directors if required.

Yes. If IFSCA is not satisfied with the candidates proposed, it may request alternate names. Ultimately, IFSCA can appoint its own Nominee Director with PID powers to safeguard public interest.

· NRC must formulate and maintain a performance review policy for PIDs with clear evaluation criteria. · Areas evaluated include: · Past contributions and responsibilities as PIDs, · Expertise applied during term, · Their contribution to balancing board skill sets, · General attributes like attendance and professional integrity. · The performance review policy must be approved by the Governing Board.

Full candidate details including: · Personal info and educational qualifications, · Employment and directorship history, · Director Identification Number (DIN), · Representations confirming independence and no conflicts, · Regulatory or criminal history, · Disclosures about family members involved in IFSC markets, · Undertaking to abide by IFSCA’s Code of Conduct, · Consent letter for appointment.

Yes, QS-SCC applicants must have a minimum net worth equivalent to USD 10 million as per the latest audited statement.

Bullion must be sourced directly from: LBMA-accredited refiners, UAE Good Delivery-accredited refiners, or refiners/entities that have been members for at least five years of approved exchanges such as: London Bullion Market Association (LBMA) CME Group (COMEX) Shanghai Gold Exchange International (SGEI) Dubai Gold & Commodities Exchange (DGCX) Dubai Multi Commodities Centre (DMCC) Borsa Istanbul (BIST) Or others as specified by IFSCA

A QS-IFSC is a unit set up in the International Financial Services Centre (IFSC) eligible to supply bullion on IIBX after obtaining a No Objection Certificate (NOC) from IFSCA and complying with all relevant rules and documentation requirements.

A QS-SCC must: Submit the KYBD form and additional documents to IIBX, Complete demat account documents for IIDI, Provide required forms to their clearing member (TCM/TSM/PCM).

All QS entities must comply with applicable IFSCA regulations, guidelines, and circulars from time to time, as well as documentation, sourcing norms, and due diligence requirements.

A QS-Client is an entity that can supply bullion and also trade Bullion Depository Receipts (BDRs) on IIBX by opening an account with a Bullion Trading Member (TM), Bullion Trading cum Clearing Member (TCM), or Bullion Trading cum Self Clearing Member (TSM).

They ensure that only credible, financially sound, and compliant entities can supply bullion on IIBX, maintaining market integrity and protecting all market participants.

No, QS-SCC entities can only participate in supplying (selling) bullion; they are not allowed to buy Bullion Depository Receipts (BDRs) on IIBX.

The KYBD form is a regulatory document that collects essential details about entities wishing to supply bullion on IIBX, ensuring compliance and transparency.

A QS-Client must: Submit the KYBD form and required documents to IIBX, Submit demat account documents to India International Depository IFSC Limited (IIDI), Complete application forms required by their TM/TCM/TSM.

A QS-SCC is a special type of supplier that can only participate on the 'sell' side (not permitted to buy BDRs) on IIBX and must open a Special Category Client account with a TCM, TSM, or a Professional Clearing Member (PCM).

Yes, a QS-Client must have a minimum net worth equivalent to USD 6 million as per their latest audited financial statement.

The supplied bullion must: Be deposited in India International Depository IFSC Limited (IIDIL) empaneled vaults, Comply with the OECD Due Diligence Guidance for Responsible Supply Chain of Minerals from Conflict-Affected and High-Risk Areas.

Any company, Limited Liability Company (LLC), or Limited Liability Partnership (LLP) legally incorporated in its home country may apply to become a Qualified Supplier on India International Bullion Exchange IFSC Limited (IIBX), subject to submitting all required documentation, including the Know Your Bullion Depositor (KYBD) form.

There are three types of Qualified Suppliers: QS-IFSC (Qualified Supplier with operations within IFSC) QS-Client (Qualified Supplier-Client) QS-SCC (Qualified Supplier – Special Category Client)

Once approval for deletion of a premises is granted, the unit must: a) If a registered Lease Deed existed for the deleted premises: Submit a copy of the cancelled Lease Deed for that premises to the office of Administrator (IFSCA) within 30 days of approval in the SEZ Online portal. b) The unit must immediately vacate the deleted premises. Under no circumstances should the unit continue to occupy or operate from the deleted premises beyond 30 days from the date of deletion approval.

Yes. All IFSC units whose commencement has been officially recorded in the SEZ Online portal must file an APR for every financial year, including the year of commencement.

No. If the unit has submitted its intimation of commencement along with all required documents before the LOA expiry date, there is no need to apply for a separate LOA Extension. Once the commencement is formally taken on record by the office of Administrator (IFSCA), the LOA validity dates are automatically updated in the SEZ Online portal.

Yes. The SEZ Online portal allows you to submit or update past month’s SERFs. But it’s strongly advised to file it every month on time.

No. MPRs must be submitted only through the SEZ Online portal. Physical or email submissions are not accepted.

The approval of a BLUT happens in two stages: 1️ First Stage: Approval of the physical BLUT document. 2️ Second Stage: Approval through the SEZ Online portal, by submitting a ‘New LUT’ request. .

The approval process is as follows: The office of Administrator (IFSCA) will review the application. It is then placed before the Unit Approval Committee (UAC) during its meeting. Important: The applicant unit is not required to appear before the UAC for this matter. Once the UAC approves: The decision is recorded in the Minutes of the UAC meeting. The ‘Free Form – Broadbanding/Capacity Enhancement’ request is then approved in the SEZ Online portal. An amended LOA is generated in the SEZ Online portal. The unit can then download the amended LOA from its SEZ Online portal account, against the ID of the submitted request.

The unit should submit a ‘Free Form - Unit - Intimation of DCP’ request on the SEZ Online portal. Along with this, upload a copy of the physical approval letter as proof of Commencement. This will enable the office of Administrator (IFSCA) to officially take it on record in the SEZ Online portal.

The commencement of service activity will not be officially recorded without a registered Lease Deed. The unit must ensure that the Lease Deed is registered and submitted along with the intimation of commencement through the SEZ Online portal.

No — a unit cannot shift to a new premises or add another premises to their approved address without prior approval from the Administrator (IFSCA). As per Condition 13 of Form-H (BLUT format), a unit is prohibited from changing its premises without written permission from the Administrator (IFSCA). Operating from a premises not included in the unit’s Letter of Approval (LOA) is a violation of the SEZ Act/Rules and can result in monetary penalties or even cancellation of the LOA.

An Eligibility Certificate (EC) is a document issued by the Administrator (IFSCA) under the Gujarat SEZ Act/Rules. It is important because this certificate is necessary for SEZ units to: Claim certain State Government tax exemptions, such as stamp duty exemptions on property transactions or leases within the SEZ. In short — without this EC, a unit cannot avail those specific state tax benefits available to SEZ units.

No. These must be filed only via the SEZ Online portal. Submissions by physical form or email are not accepted.

Once an application is approved during the UAC meeting: The decision is formally recorded in the Minutes of the Meeting. After the Minutes are finalized and approved, the Letter of Approval (LOA) is issued to the applicant. The LOA is issued directly through the SEZ Online portal itself.

SEZ stands for Special Economic Zone. In India, SEZs are specially designated areas created under the Special Economic Zones Act, 2005 to promote exports and offer businesses various tax benefits and incentives. The International Financial Services Centres Authority (IFSCA) is a government body set up by an Act of Parliament to develop and regulate financial services in India’s IFSCs. As per Section 18 of the SEZ Act, an International Financial Services Centre (IFSC) can only be established inside an SEZ. GIFT-IFSC in Gujarat is the first such IFSC in India. Because of this, any company or entity that gets approval or registration from IFSCA to operate in an IFSC automatically becomes an SEZ unit too. It must therefore follow both the IFSCA rules and the SEZ Act and Rules.

No. Even if the unit has a long-term, registered Lease Deed, it stands void on Exit approval under Rule 11(5) of SEZ Rules. The unit must: Stop occupying the premises Vacate the premises after Exit approval To get the same premises for future activity, a new Lease Deed and fresh approvals will be needed.

Yes — even if the LOA has expired, the unit can still apply for LOA Renewal in the SEZ Online portal. However: They must attach a covering letter giving detailed reasons for the delay. Remember, if no action is taken after expiry, monetary penalties may follow.

A Letter of Approval (LOA) is an official approval granted under the SEZ Act to every unit that wants to operate in a Special Economic Zone (SEZ). The LOA specifies the exact set of authorized operations or activities that the unit is permitted to perform within the SEZ. It’s important to note that a unit can only provide the services or carry out the activities listed in its Authorized Operations section of the LOA, and nothing beyond those activities is allowed under SEZ law.

After the application is submitted via the SWIT portal or directly in the SEZ Online portal, any deficiency or query is typically raised within 1 to 2 working days in the SEZ Online portal. The applicant must regularly log in to the SEZ Online portal, open their application request from the Inbox, and check the Remarks History link of the application to find out about any deficiencies or discrepancies raised.

If an applicant misses the deadline for submitting their LOA application for a particular Unit Approval Committee (UAC) meeting, their application — once it is complete — will be considered in the next UAC meeting. No applications are accepted for inclusion after the deadline for a particular meeting. Complete applications are simply carried forward to the next scheduled UAC

The Unit Approval Committee (UAC) typically conducts its meeting once every week. These meetings are conducted in a hybrid mode — meaning: Some participants attend in person. Others can join via video conference (VC). The date of each UAC meeting for the week, along with the deadline for submission of applications to be considered in that meeting, is communicated in advance through a Meeting Notice issued in the preceding week. You can access these Meeting Notices -https://ifsca.gov.in/Pages/Contents/SEZUnitApproval

Under the SEZ Act, every SEZ is managed by a Development Commissioner responsible for overall administration and supervision of that zone. However, to make things simpler for businesses in IFSCs, the government has vested the powers of the Development Commissioner for IFSC units with a senior officer of IFSCA, called the ‘Administrator (IFSCA)’. This is done under Section 12(7) of the SEZ Act to provide a single, unified regulatory framework for IFSC units.

In case of portal access or technical issues: Contact NSDL/NDML using the contact details provided on the portal. Or write to: abhisheka@ndml.in aweinashj@ndml.in

If a unit wants to start offering additional services not originally mentioned in its Letter of Approval (LOA)Broad bandingBroadbanding. For example: If a unit has LOA for Aircraft Leasing and wants to add Ship Leasing. Or if a unit has LOA for FME (Non-Retail) and now wants to become FME (Retail). Key Rule: Before obtaining IFSCA’s regulatory approval for these new services, the unit must first get its Authorized Operations in the LOA amended through SEZ procedures.

No. The intimation must be filed only through the SEZ Online portal. Intimations sent via physical copies or email are not accepted for processing or approval.

SERF is a report summarizing details of all invoices raised by the unit for service exports during a particular month.

Once an LOA application is submitted and received in the SEZ Online portal, the office of Administrator (IFSCA) examines the application. If there are any deficiencies or queries in the application, these are raised within the SEZ Online portal itself. The applicant must regularly log in to the SEZ Online portal to check for any such observations and address them by making the necessary rectifications, so the application is marked as complete. Once the application is complete: The Agenda for each Unit Approval Committee (UAC) meeting is published on the IFSCA website one or two days before the meeting. The UAC meeting Agenda can be accessed [here] (as per original context link). Additionally: The office of Administrator (IFSCA) sends an email notification to applicants whose applications have been included in the Agenda. This email typically contains: A copy of the Agenda. The meeting link for joining via Video Conference (VC). Important: Applicants included in the Agenda are expected to reply to this email, providing: The name(s) of their authorized representative(s) who will attend the UAC meeting. Along with Authorization Letters issued in favor of those representatives.

No. The ‘LOA Renewal’ request must be filed only in the SEZ Online portal. Submissions through physical or email mode will not be accepted for processing or approval.

Once the unit submits its ‘LOA Extension’ request in the SEZ Online portal: Any deficiencies or queries raised by the office of Administrator (IFSCA) will appear in the portal itself. The unit must log in to the SEZ Online portal, open the ‘LOA Extension’ request from their Inbox, and check the Remarks History section to view any deficiencies or discrepancies. After all corrections (if any) are made and the request is approved: The LOA dates get automatically updated in the portal. A letter approving the LOA Extension is generated in the portal. The unit can download this approval letter from the SEZ Online ID of the corresponding ‘LOA Extension’ request.

No The application for Broadbanding of services must be submitted only through the SEZ Online portal. Applications sent by physical means (hard copy) or email will not be accepted or processed.

Instruction 109 provides guidelines on reporting and obtaining approvals for changes such as: Change of Name Change in Shareholding Pattern Business Transfer Arrangements Court-approved Mergers/Demergers Change of Constitution Change of Directors, etc. As per this Instruction, such changes must be approved by the Unit Approval Committee (UAC).

If a unit doesn’t submit the Lease Deed within six months: As per Rule 18(2), the Unit Approval Committee (UAC) can withdraw the LOA after giving the unit an opportunity to explain. If unable to register within the deadline, the unit must immediately email a request to ifscaadmin@ifsca.gov.in, asking for the UAC’s permission to condone the delay and extend the deadline. The UAC will review this request in its meeting. The unit’s authorized representative must attend and explain the reasons for the delay. The UAC can either: Grant an extension Or, if not satisfied, withdraw the LOA, which effectively terminates the unit’s SEZ status.

The MPR must be filled and submitted online through the SEZ Online portal by logging into the unit account and using the ‘Prepare Monthly Reports’ section.

The step-by-step process is as follows: (i) The physically executed BLUT (prepared on ₹100 non-judicial stamp paper, notarized in Gujarat, with all necessary attachments) must be sent by post/courier to the office of Administrator (IFSCA) along with a covering letter addressed to the Administrator (IFSCA). (ii) Upon receiving the BLUT: The office of Administrator (IFSCA) will verify its format, contents, and attached documents. If any discrepancies or mistakes are found, these will be communicated to the unit for correction. (iii) After all corrections are made and complete documentation is received: The BLUT is forwarded to the Specified Officer of Customs for their approval. (iv) Once the Specified Officer approves the BLUT, it is then finally approved by the Administrator (IFSCA).

(i) The unit must file the SERF for every month starting from the month they commenced services (i.e., raised their first invoice), once their intimation of commencement is officially taken on record by Administrator (IFSCA). (ii) Example: If the unit raised its first invoice on 15.07.2024 Intimated commencement on 01.08.2024 And it was recorded by IFSCA on 15.09.2024 The unit must file the SERF for July and August immediately after the commencement is officially taken on record.

If a unit doesn’t have access to the SEZ Online portal: It must retrieve access by contacting NSDL/NDML using the details available here Or email to: abhisheka@ndml.in aweinashj@ndml.in The office of Administrator (IFSCA) accepts applications only via SEZ Online portal. Physical or email applications are not entertained.

Yes. Even though the IFSC is located within a Special Economic Zone (SEZ), all units operating in GIFT-IFSC are required to obtain an IEC from DGFT if they intend to engage in any kind of import or export activities, including cross-border financial services, software export, or procurement of goods from outside India.

(i) After submitting the application in the SEZ Online portal, any deficiencies or queries will be raised within the portal itself. The unit must: Log in to the SEZ Online portal. Access the ‘Free Form – Change of Area (Addition)’ request from the Inbox. Check the ‘Remarks History’ section for any comments, deficiencies, or discrepancies raised by the office of the Administrator (IFSCA). (ii) Once the request is approved: The address details get updated in the SEZ Online portal. A formal approval letter for change/addition of address is issued within the SEZ Online portal. The unit can download this letter from the portal using their SEZ Online ID. (iii) After approval: A fresh Eligibility Certificate (EC), reflecting the new or additional premises, is sent to the unit separately by email.

The deadline is specified in PUBLIC NOTICE No. 03/2024-25 dated 23.12.2024, available on the IFSCA website or through the portal.

After receiving the Letter of Approval (LOA), the unit must: Pay necessary registration and AMC fees for activating their SEZ Online portal access. Apply to the Development Commissioner (DC), GIFT-SEZ for getting SEZ ID cards for their employees.

The APR must be prepared in Form-I format (as per SEZ Rules, also attached as Annexure-B in the booklet). It should be: Signed by an authorised signatory of the unit Certified by an independent Chartered Accountant or Cost Accountant

To check if the Letter of Approval (LOA) has been issued: The applicant should log in to the SEZ Online portal. Open their application request from the Inbox. If the LOA has been issued, they can download the LOA directly from the portal.

If a unit wants to increase its Bond amount, it must: 1. Submit a fresh BLUT in physical form to the office of Administrator (IFSCA), following the same procedure as for the original BLUT. 2. Once approved by both the Specified Officer and Administrator (IFSCA), the PDF copy of the approved BLUT will be emailed to the unit. The original will be retained by the Administrator’s office. 3. The unit must then file an ‘Update LUT’ request in the SEZ Online portal, attaching the new PDF, and carefully updating the details as per the new approved BLUT. 4. Once the ‘Update LUT’ request is approved, the increased Bond amount and updated validity details will reflect in the SEZ Online portal.

The applicant’s representative attending the UAC meeting must meet the following requirements: Must be authorized through a valid Board Resolution or Authority Letter issued by: The Board of Directors in case of a company, or The Partners in case of a partnership or LLP. The representative must also submit: A copy of this authorization letter, and Valid identification documents (like Aadhaar, PAN, Passport, etc.) These documents must be submitted to the office of Administrator (IFSCA) by email before the UAC meeting. Additionally: The authorized representative is expected to be well-versed with the application proposal, and Should be fully prepared to explain and discuss both: The short-term operational plans, and The long-term strategic plans of the applicant company/unit during the UAC meeting.

If a unit doesn’t have portal access, they should: Contact NSDL/NDML via the details provided on the portal, or Email at: abhisheka@ndml.in or aweinashj@ndml.in The office of Administrator (IFSCA) accepts LOA Renewal applications only through the SEZ Online portal.

(i) As per SEZ Rules, ‘commencement of service activity’ isn’t precisely defined. However, in general business practice: The raising of the first invoice and receiving payment is considered proof of commencement. (ii) For certain business categories regulated by IFSCA (like Funds, which may not issue invoices), an indicative list of acceptable documents for commencement is provided in Annexure-C of the SEZ Compliance FAQ Booklet. Important: This list is a general guideline. In some cases, additional or alternative documents may be required depending on the specific business operations.

If a unit cannot access the SEZ Online portal: They should contact NSDL/NDML using the details provided by the portal or email abhisheka@ndml.in or aweinashj@ndml.in to get access restored. Note: The office of Administrator (IFSCA) accepts Commencement intimations only through the SEZ Online portal — physical or email submissions will not be entertained.

At the time of the Unit Approval Committee (UAC) meeting: (i) The applicant is expected to: Give a brief presentation or explanation about their project proposal. Respond to any questions posed by the UAC members about their application, business plans, or operations. (ii) At the end of the meeting: The UAC will inform the applicant whether their proposal has been approved or not approved. Further: The decisions taken on each application during the meeting are recorded in the Minutes of the UAC meeting, which are normally published on the IFSCA website within a week.

To inform the office of Administrator (IFSCA) about the commencement of services, the unit must: Submit a ‘Free Form - Unit - Intimation of DCP’ request in the SEZ Online portal. Attach the following documents combined into a single PDF file: a) Proof of commencement of service activity (such as the first invoice or other acceptable documentation). b) IFSCA Letter of Authorisation / Certificate of Registration / Recognition / or any other form of regulatory approval. c) Registered Lease Deed. Important: Intimations sent via physical documents or email are not accepted for processing or approval.

Once the application is submitted: Any deficiencies or queries raised by the office of Administrator (IFSCA) will be reflected in the SEZ Online portal itself. The unit should: Log in to the SEZ Online portal. Access the ‘Free Form – Change of Area (Deletion)’ request from the Inbox. Check the ‘Remarks History’ section to see if any deficiencies, corrections, or queries have been raised. Once the request is complete and approved in the portal: The address details will be updated in the SEZ Online portal. A formal letter of approval for deletion of address will be issued. The unit can download this approval letter from the portal under the same request ID.

If the LOA has expired at the time of registering the Lease Deed: The unit must first apply for an LOA Extension through the SEZ Online portal. Registering a Lease Deed against an expired LOA is a violation of Rule 18(2) and may attract penalties.

The unit must file a ‘LOA Renewal’ request on the SEZ Online portal with the following documents merged into a single PDF: Form-F1, duly filled and signed (as per Rule 19(6A)) Annual Performance Reports (APRs) for the last 5 completed financial years, submitted previously in the SEZ Online portal. Note: Physical or email submissions are not accepted.

The Importer-Exporter Code (IEC) is a unique 10-digit business identification number issued by the Directorate General of Foreign Trade (DGFT), Government of India. It is mandatory for any business or entity involved in import or export activities to or from India. No entity can legally engage in import or export transactions without obtaining a valid IEC.

They must immediately retrieve access to the portal by contacting NSDL/NDML via the contact details available on the portal or write to abhisheka@ndml.in or aweinashj@ndml.in. Important: The Administrator (IFSCA) accepts APR submissions only through the SEZ Online portal — physical or email submissions are not allowed.

The steps are: 1. The office of Administrator (IFSCA) receives the physical documents (cover letter and Form-L). 2. The office obtains No Dues/No Objection certificates from: The Specified Officer GIFT-SEZ The Developer (GIFT Company Limited) The relevant Co-Developer The IFSCA Regulatory Team 3. Exit approval is granted only after the unit has ceased to be regulated by IFSCA. 4. Once all No Dues letters are received and the application is verified: An Exit approval letter is sent by email to the unit The corresponding ‘Free Form - Final Exit from SEZ Scheme’ request is also approved in the SEZ Online portal The unit’s Exit status is updated in the SEZ Online portal

As per Rule 22(3) of SEZ Rules, every unit must file an Annual Performance Report (APR) in Form-I to the Administrator (IFSCA).

The deadline is mentioned in PUBLIC NOTICE No. 03/2024-25 dated 23.12.2024, available through official channels.

After the physical BLUT has been approved, the unit must complete the following steps in the SEZ Online portal: 1️ File a ‘New LUT’ request in the SEZ Online portal. Attach the PDF copy of the approved BLUT as a supporting document. 2️ Carefully enter the details of: Bond amount Name of the Obligor And other relevant details as per the approved physical BLUT. Ensure there are no mistakes. 3️ Once the ‘New LUT’ request is submitted, it will be approved by both: The Specified Officer of Customs, and The Administrator (IFSCA) in the SEZ Online portal. 4️ After approval, the Bond amount and LUT validity dates will be automatically updated against the unit’s profile in the SEZ Online portal.

The BLUT must be prepared in the prescribed format called Form-H, which is specified in the SEZ Rules. The format for Form-H is attached as Annexure-A in the relevant compliance document or notification.

No. The unit must not raise invoices or accept payments against invoices if their LOA is invalid or expired. The unit should apply for an LOA Extension at least one month before its expiry. Only after obtaining the extension approval should the unit proceed with issuing invoices or submitting an intimation of commencement.

No. The validity of the LOA is considered extended to five years from the date of commencement only after the office of Administrator (IFSCA) officially takes the commencement on record in the SEZ Online portal. Mere submission of commencement intimation by the unit does not automatically extend the LOA validity. The unit must ensure that the commencement is formally updated and recorded by the office of Administrator (IFSCA) in the portal to secure the five-year validity.

The Administrator (IFSCA) examines the request. It is placed before the Unit Approval Committee (UAC) in their meeting. The unit is not required to appear for the UAC meeting. After UAC approval, it’s recorded in the UAC Minutes, and the corresponding request is approved in the SEZ Online portal. In case of a Change of Name, a separate approval letter is also sent by email.

As per Condition 7 of Form-H of SEZ Rules, APR must be submitted within 180 days after the close of the financial year to both: Administrator (IFSCA) Specified Officer

No — in general. For all activities where the application filing option has been made available through the SWIT portal by IFSCA, the application for the SEZ LOA must be filed only through the SWIT portal. This requirement has been officially communicated via a Public Notice issued by IFSCA, which can be accessed for reference. However, there are a very limited number of activities requiring IFSCA approval which are not yet enabled in the SWIT portal. In such cases, the application for the SEZ LOA must be submitted directly in the SEZ Online portal by filing Form-FA

Since an IFSC is legally required to be set up within an SEZ, any company planning to operate as an IFSC unit must first get a Letter of Approval (LOA) under the SEZ Act. Only after getting this SEZ approval can the entity apply for and receive the necessary licenses and permissions from IFSCA.

As per Rule 19(4) of SEZ Rules, the Letter of Approval (LOA) issued to a unit remains valid for one year from its date of issuance. 📌 Within this one year, the unit must commence its business operations.

If a unit wishes to remove a premises from their list of approved addresses: Log in to the SEZ Online portal. Submit a ‘Free Form – Change of Area (Deletion)’ request. In the request form, clearly mention the premises address that needs to be deleted. Important: A unit cannot apply to delete the only premises it holds, as this would render the LOA invalid under law. At least one valid, approved premises must always remain linked to a unit’s LOA.

An IFSC unit, being an SEZ unit too, must follow several rules and procedures under the SEZ Act and Rules at different stages of its business operations. These compliances cover everything from starting the unit to its day-to-day operations and eventual exit or closure. The compliance process broadly follows these stages: Stages in the Life Cycle of an IFSC (SEZ) Unit: 1. Before Starting Operations (Pre-Setup Stage): Apply for a Letter of Approval (LOA) under the SEZ Act. Enter into a Lease Agreement for office space in the SEZ. Submit initial documentation and permissions to the SEZ authorities. 2. At the Time of Setting Up (Setup Stage): Execute a Bond-Cum-Legal Undertaking (BLUT). Get the necessary Import-Export Code (IEC), if required. Obtain IFSCA registration/license after SEZ LOA. 3. During Operations (Operational Stage): Submit periodic performance reports to SEZ/IFSCA. File annual returns and compliance reports. Follow the rules for customs duty exemptions, foreign currency transactions, and other SEZ benefits. Maintain proper records of import/export transactions. Comply with specific conditions mentioned in the LOA and SEZ Rules. 4. At the Time of Closure (Exit Stage): Apply for exit/exit permission to close operations. Settle all dues and clear any outstanding compliance issues. Surrender the SEZ approvals and registrations. In short: An IFSC unit must follow SEZ-related compliances at every stage — before setup, during business operations, and at the time of closing the unit.

As per Rule 22 of the SEZ Rules, a Bond-cum-Letter of Undertaking (BLUT) is a legal document that a SEZ unit is required to execute. The purpose of the BLUT is to: Record the unit’s obligations. Confirm the unit’s compliance with the provisions of the SEZ Act and Rules. Once executed, the BLUT must be jointly approved by: The Specified Officer of Customs, and The Administrator (IFSCA).

The unit must submit a request on the SEZ Online portal under the tab ‘Factsheet and UAC Applications’ and upload the required documents. Example: For a Change of Name, submit the new Certificate of Incorporation issued by MCA.

Units must file an ‘APR’ request on the SEZ Online portal and attach the certified APR (in PDF format) with this request.

Once the unit submits the ‘New LUT’ or ‘Update LUT’ request in the SEZ Online portal: 1. If there are any deficiencies, discrepancies, or queries, these will be raised within the SEZ Online portal itself. 2. The unit must: Log in to the SEZ Online portal Access the Inbox Open the specific ‘New LUT’ or ‘Update LUT’ request Check the Remarks History link within the request to see any remarks or pending queries. 3. Once the request is approved: The Bond amount and LUT validity dates will be automatically updated for the unit in the SEZ Online portal. Important Tip: Units should proactively monitor the SEZ Online portal after submitting their requests to ensure timely response to any queries and avoid processing delays.

As per Rule 19(4) and 19(6) of the SEZ Rules: A Letter of Approval (LOA) issued to a unit is valid for one year from the date of issue. The unit must commence its service operations within this one-year period. The date of commencement must be intimated to the Administrator (IFSCA). Once service operations commence and are taken on record: The LOA validity extends to five years from the date of commencement of services.

The Bond Value Calculation Sheet is a document that details the total amount of Customs duties and GST that the SEZ unit expects to save over the next five (05) financial years. The BLUT must be executed for an amount not less than the total amount projected in this calculation sheet. Important Requirements: The calculation sheet should be prepared on the official letterhead of the applicant unit. It must be signed by the Obligor with the unit’s official seal and stamp.

No. Even if: The unit wants to get a fresh IFSCA license later Or has a mutual arrangement with the Co-Developer to continue paying rent As per Rule 11(5) of SEZ Rules, the Lease Deed becomes invalid immediately after Exit approval. The unit cannot occupy the premises after Exit and must vacate.

If the applicant hasn’t received their SEZ Online portal login credentials: They should contact NSDL (National Securities Depository Limited) using the contact details available [here] (as per original context link), or Directly email Mr. Deepak Gupta at deepakg@ndml.in for assistance.

A unit does not need to make any separate application to get the Eligibility Certificate. Here’s how it works: Once the unit’s BLUT is approved by both the Specified Officer of Customs and the Administrator (IFSCA), The PDF copy of the approved BLUT along with the Eligibility Certificate (EC) is automatically sent to the unit by email. There’s no need for any additional form-filling or separate request to obtain the EC — it’s issued as part of the BLUT approval process.

A unit may lose access if it: Fails to update its GSTIN in the SEZ portal. Does not pay registration or Annual Maintenance Charges (AMC) fees for the portal. For such cases too, the unit should contact: NSDL/NDML as per contact details on the portal Or email at abhisheka@ndml.in / aweinashj@ndml.in

As per Public Notice No. 02/2024-25 dated 05.11.2024 issued by the office of Administrator (IFSCA), the following important points must be kept in mind while executing the BLUT: a) The BLUT must strictly follow the prescribed format in Form-H of the SEZ Rules, 2006, along with the instructions mentioned in Instruction No. 2 dated 24.03.2006 (F. No. 5/1/2006-EPZ) issued by the Department of Commerce. b) A letter from the entity accepting the terms and conditions of the Letter of Approval (LOA) must be attached to the BLUT. c) A proper Bond Value Calculation Sheet should be attached, showing the amount for which the BLUT is being executed. Care must be taken to ensure that the bond value is not less than the amount stated in the calculation sheet. The calculation sheet must be signed by the Obligor. d) A Board Resolution authorizing the designated Obligor to sign and execute the BLUT on behalf of the SEZ unit under the SEZ Act and Rules must be attached. e) The name, address, and passport-size photograph of the Obligor should be correctly filled and pasted on the BLUT. A valid identity proof of the Obligor should also be attached. f) The name and address of the witnesses must be properly mentioned in the BLUT, and a valid identity proof for both witnesses should be attached.

Once Exit approval is issued: The unit must completely stop all operations in the IFSC/SEZ. As per Rule 11(5) of SEZ Rules, the Lease Deed and lease rights over the premises automatically become invalid on approval of the Exit. The unit must: Vacate the premises Stop using the address for operations Start the process to cancel the Lease Deed.

Once the Lease Deed is registered: Email a scanned copy to ifscaadmin@ifsca.gov.in Simultaneously, submit a ‘Unit Lease Deed’ request in the SEZ Online portal. Ensure that: The term/duration of the Lease Deed And the correct SEZ address of the unit are properly mentioned in the online request.

The unit should: Log in to the SEZ Online portal. Submit a ‘Free Form – Change of Area (Addition)’ request. Attach a copy of the Provisional Letter of Allotment (PLOA) from the Developer or Co-Developer for the additional premises. Clearly mention in the form that the request is for an addition of premises to the existing address.

As per Rule 19(6A): The LOA can be renewed either for 5 years or for a shorter period. Any violations may lead to: Monetary penalties Renewal for less than 5 years Or, in serious cases, cancellation of the LOA under Section 16 of the SEZ Act.

No. Units must first obtain approval of the BLUT in physical form as explained earlier. Only after receiving the approved physical BLUT, the unit should upload the PDF copy in the SEZ Online portal by submitting a ‘New LUT’ request.

Once a unit obtains their IEC certificate from DGFT, they must: Log in to the SEZ Online portal. Submit a ‘Free Form – IEC Application’ request. Attach a pdf copy of the IEC certificate issued by DGFT. The office of Administrator (IFSCA) will review and approve the Free Form request. Upon approval, the IEC details will be updated in the unit’s profile data within the SEZ Online portal. Note: Keeping the IEC details updated in the SEZ Online portal is mandatory for seamless processing of import/export transactions for the unit.

As per Rule 19(6A): The application must be submitted at least two months before the LOA expiry date. If filed after this two-month window, a covering letter explaining the delay must be attached along with the renewal request in the portal. Delays can attract monetary penalties under SEZ Rules.

The activities for which the LOA application has to be submitted directly in the SEZ Online portal are specified in the Public Notice issued by IFSCA regarding the SWIT portal. This Public Notice lists out the specific activities that are either enabled in the SWIT portal or still need to be applied for directly through the SEZ Online portal. In addition to the activities mentioned in that Public Notice, it is also clarified that applications for SEZ LOA related to Funds are required to be filed directly in the SEZ Online portal. Further, applicants who are filing their SEZ LOA applications directly in the SEZ Online portal must also ensure that they file the corresponding application for IFSCA Regulatory approval simultaneously. Important: The application for SEZ LOA will only be processed once the corresponding IFSCA Regulatory application has been filed. This is a mandatory requirement to ensure proper coordination between the SEZ authority and IFSCA for approving any unit’s operations in the IFSC-SEZ area.

Units should take care of the following while working on the portal: Check your Inbox regularly in the SEZ Online portal to track the status of your submitted applications/requests. Merge all documents into a single PDF file before submitting any request, since the portal allows uploading only one PDF per request. Use the correct submission flow: Every unit has multiple user levels — Maker, Checker, and Approver. Many units mistakenly send requests from the Maker ID to the Approver ID and think it’s submitted to IFSCA. Important: Only after submission from the Approver ID does the request officially reach the Administrator (IFSCA) for processing.

After submitting the intimation in the SEZ Online portal: Any deficiencies or queries will be raised within the portal itself. The unit must login to the portal, open their ‘Free Form - Unit - Intimation of DCP’ request in the Inbox, and check the Remarks History section for any observations. Once the commencement is officially recorded: The LOA dates are automatically updated in the portal. A letter confirming the approval of Commencement will be issued and can be downloaded from the unit’s SEZ Online ID.

Exceptions may be considered, but only in very rare cases where: The technical issue or malfunction is clearly caused by the SWIT portal or the SEZ Online portal itself (not due to any fault of the applicant). The applicant is able to demonstrate that their case requires urgent consideration and cannot wait until the next UAC meeting. Important: Any delays caused by: The applicant’s own mistakes, Misunderstandings of the process, or Oversight on their part will not be treated as technical errors or glitches and no exceptions will be allowed in such cases.

A unit can apply for an IEC online through the official DGFT website. Here’s the step-by-step:| Visit the DGFT website: DGFT IEC Application Portal Register your business on the portal if not already registered. Fill in the required details in the IEC profile management section. Upload necessary documents and submit the application. Pay the prescribed fee. Once approved, the DGFT will issue your IEC certificate digitally.

If portal access is missing: Contact NSDL/NDML support using the details provided here Or email: abhisheka@ndml.in aweinashj@ndml.in to get the login credentials or resolve access issues.

The unit should: Log in to the SEZ Online portal. Submit a ‘Free Form – Change of Area (Addition)’ request. Attach a copy of the Provisional Letter of Allotment (PLOA) issued by the Developer or Co-Developer for the new premises. Clearly mention in the form that the request is for a change of premises.

The unit must submit an ‘LOA Extension’ request in the SEZ Online portal with the following supporting documents (merged in a single PDF file): a) Cover Letter Explaining the steps and initiatives taken to commence operations. Giving detailed reasons for the delay in commencing operations. b) Form-F1 A duly filled Form-F1 (Annexure-D of the SEZ Compliance booklet). c) Present Progress Report Highlighting both: SEZ compliance milestones completed. IFSC operations progress (like funding raised, agreements signed, procurement milestones etc.) d) Registered Lease Deed e) IFSCA Approval Document Such as Letter of Authorization, Certificate of Registration/Recognition, or any other approval in applicable form. f) Additional Supporting Documents Such as NOCs, agreements, invoices, bank statements, or any other evidence of business progress. Once the request is submitted: It is examined by the office of Administrator (IFSCA). Then forwarded to the Board of Approval (BoA) for consideration and approval.

The list of documents required to be submitted along with the application for a Letter of Approval (LOA) is provided in Public Notice No. 02/2024-25 dated 05.11.2024, issued by the office of Administrator (IFSCA). You can view this Public Notice https://ifsca.gov.in/Pages/Contents/SEZUnitApproval

Yes. The SEZ Online portal allows submission of APRs for previous financial years too. However, it’s strongly recommended to submit the APR within the 180-day deadline.

Units can apply for an RCMC directly on the DGFT portal through this link: https://www.dgft.gov.in/CP/?opt=e-rcmc

No. SERFs must be filed only through the SEZ Online portal. Submissions by physical form or email are not accepted.

Once the new address is approved, the unit must comply with the following: a) Submit a copy of the registered Lease Deed for the new or additional premises, as required under Rule 18(2) of the SEZ Rules, 2006. b) In case of a change of premises: If the unit already had a registered Lease Deed for the old premises, it must get that Lease Deed cancelled. A copy of the cancelled Lease Deed must be submitted to the office of Administrator (IFSCA). c) The BLUT (Bond-cum-Letter of Undertaking) executed for the previous premises, along with its terms and conditions, shall continue to remain binding for the new or additional premises. d) If the unit had not executed a BLUT earlier for the old premises: It must execute a fresh BLUT for the new premises. Submit the BLUT for approval to the office of Administrator (IFSCA) following the same standard process.

They should retrieve portal access by contacting NSDL/NDML using the details available or email abhisheka@ndml.in / aweinashj@ndml.in. The Administrator (IFSCA) accepts these requests only through the SEZ Online portal.

The term ‘commencement of service activity’ is not specifically defined under the SEZ Act or Rules. Generally, it is understood to mean the date on which the unit issues its first invoice for services rendered. However, for certain specific business verticals in IFSC — like Funds, Broker-Dealers, and others where invoices are not typically issued — the commencement is determined based on the nature and operations of the business and supporting records. The Administrator (IFSCA) considers this on a case-to-case basis.

Yes. All IFSC units regulated by IFSCA with a valid LOA must submit the MPR every month without fail via the SEZ Online portal.

They should immediately contact NSDL/NDML via details available on the portal, or email abhisheka@ndml.in or aweinashj@ndml.in to restore access. The office of Administrator (IFSCA) accepts SERFs only via the SEZ Online portal.

If a unit needs to procure sand for interior construction work within GIFT IFSC, it must follow this process: 1. Log in to the SEZ Online portal. 2. Submit a ‘Free Form – Others’ request. 3. Attach a covering letter mentioning: The purpose: procurement of sand for interior construction. The quantity of sand required. 4. Once this ‘Free Form – Others’ request is approved in the SEZ Online portal: An official approval letter for sand procurement is issued in the portal. 5. The unit can then download this approval letter from the SEZ Online portal using the ID of the submitted request.

The unit needs to submit: A cover letter requesting Exit from GIFT-SEZ A duly filled and signed Form-L (as per SEZ Rules — also available in Annexure-E of the Compliance Booklet) Both these documents must be submitted: Physically to the office of Administrator (IFSCA) and Upload them in a ‘Free Form - Final Exit from SEZ Scheme’ request on the SEZ Online portal.

The SERF must be filled and submitted online through the SEZ Online portal, under the ‘Service Exports Reporting Form’ tab in the unit’s login.

Yes — while there may not be a formally notified deadline date, it is the responsibility of the applicant to: Promptly and properly respond to any deficiencies or queries raised in the SEZ Online portal. Rectify all deficiencies without unnecessary delay. Important: An application will only be placed before the UAC for consideration once all deficiencies have been satisfactorily addressed and rectified in the SEZ Online portal. Therefore, it is in the applicant’s own best interest to resolve any deficiencies swiftly to ensure their application is included in the Agenda for the upcoming UAC meeting.

No, it’s not mandatory to attend in person. UAC meetings are conducted in a hybrid mode — meaning participants may choose to attend either: In person at the venue, or Through Video Conference (VC). Unless specifically advised otherwise by the office of Administrator (IFSCA), applicants can attend by whichever mode is convenient to them.

The complete process for approving an LOA application is as follows: (i) For activities where the application filing is enabled on the SWIT portal: The application submitted through the SWIT portal is automatically sent to: The IFSCA Regulatory team for their regulatory approval. The Administrator (IFSCA) through the SEZ Online portal for processing the LOA application. (ii) For activities where application filing is not enabled on the SWIT portal: The LOA application must be filed directly on the SEZ Online portal. After receiving the application in the SEZ Online portal, the office of Administrator (IFSCA) seeks a confirmation from the IFSCA Regulatory team to verify that the corresponding regulatory application has been filed before moving forward. (iii) Once the LOA applications are received in the SEZ Online portal (through either method mentioned above [(i) or (ii)]): The office of Administrator (IFSCA) examines the application. If there are any deficiencies or queries, they are raised within the SEZ Online portal itself. The applicant must then log in to the SEZ Online portal and submit necessary corrections or additional documents to resolve the deficiencies and complete the application. (iv) Applications that are complete in all respects are then: Placed before the Unit Approval Committee (UAC) for their review and decision. The application is included in the Agenda for the UAC meeting. Once approved by the UAC, the decision is recorded in the Minutes of the Meeting. After the Minutes are finalized and approved, the LOA is issued to the applicant through the SEZ Online portal itself.

As per Instruction No. 02 dated 24.03.2006 issued by the Ministry of Commerce, the BLUT must be executed as follows: \It should be prepared on a non-judicial stamp paper of ₹100. It must be notarized by a Notary Public registered in the state of Gujarat (since GIFT-IFSC is located in Gujarat) The following documents and requirements must accompany the BLUT: a) The name and SEZ address of the unit must be clearly mentioned in the BLUT without any spelling mistakes or errors. b) A letter from the unit formally accepting the Letter of Approval (LOA). c) A Bond Value Calculation Sheet showing how the bond value was determined. d) A Board Resolution authorizing the designated person (Obligor) to execute and submit the BLUT on behalf of the unit. e) The signatures of the Obligor and two witnesses, along with their names and addresses, must be affixed on the BLUT. f) A recent passport-size photograph of the Obligor must be affixed on the BLUT document. g) KYC documents (such as Aadhaar card and/or PAN card) of both: The Obligor (the person executing the BLUT), and The witnesses, must be attached to the BLUT.

Once the unit submits a ‘Free Form – Broadbanding/Capacity Enhancement’ request in the SEZ Online portal: If there are any deficiencies or queries, they will be raised within the SEZ Online portal itself. The unit must: Log in to the SEZ Online portal Go to the ‘Inbox’ Open the relevant Free Form – Broadbanding/Capacity Enhancement request Check the ‘Remarks History’ link to view any comments or deficiencies raised. Once all deficiencies are resolved and the request is approved: An amended LOA is automatically generated in the SEZ Online portal. The unit can download the amended LOA from its SEZ Online ID associated with the request.

As per Rule 19(6B), the decision on LOA Renewal is based on: Export performance during the completed 5-year block Employment generated by the unit Any violations of applicable laws/statutes related to the unit's functioning Any defaults in statutory payments Any unauthorized activities undertaken by the unit without Development Commissioner’s approval

The unit must: Apply for Exit as per Rule 74 of SEZ Rules. Submit required documents (see next FAQ) and follow the formal approval process.

The MPR is a monthly report capturing key data about a unit, such as employment numbers, investments made, and other operational details.

If a unit is unable to access the SEZ Online portal, it can retrieve access by: Contacting NSDL/NDML through the contact details available on the SEZ portal or Writing an email to: 📧 abhisheka@ndml.in or aweinashj@ndml.in Important: The office of Administrator (IFSCA) accepts LOA Extension applications only through the SEZ Online portal. Submissions through physical/email mode are not accepted.

As per Rule 19(6), 19(6A), and 19(6B) of the SEZ Rules, 2006 — once a unit starts operations, its Letter of Approval (LOA) remains valid for 5 years from the date of commencement. After this 5-year period, the unit must apply to renew the LOA every 5 years to continue as an SEZ unit.

The Export Promotion Council for EOUs and SEZs (EPCES) periodically shares the list of units with RCMC to NSDL. NSDL updates these details directly on the SEZ Online portal backend. The Administrator (IFSCA) is not involved in this RCMC issuance or its online update. If a unit faces issues regarding RCMC details on the portal, they should contact: NSDL/NDML through their contact information available on the portal Or email: abhisheka@ndml.in aweinashj@ndml.in

Once the physical BLUT is approved by both the Specified Officer of Customs and the Administrator (IFSCA): A PDF copy of the approved BLUT, along with an Eligibility Certificate, is sent to the unit via email. The original physical BLUT remains with the office of the Administrator (IFSCA) for official records.

To resolve this: Download and install the E-Lock Super Signer tool from the ‘Manual and File Format’ section on the SEZ Online website. Keep the E-Lock software running while submitting your application in the portal. This will enable a successful, digitally signed submission.

As per Rule 18(2) of the SEZ Rules, every unit must submit a copy of their registered Lease Deed to the Administrator (IFSCA)within six months from the date of issue of their Letter of Approval (LOA).

Yes. All IFSC units regulated by IFSCA, whose Commencement of operations has been officially recorded by the Administrator (IFSCA) in the SEZ Online portal, must submit the SERF every month without fail.

The unit must submit an ‘LOA Extension’ request on the SEZ Online portal only, along with these supporting documents (merged into a single PDF): a) A Covering Letter: Explaining why the unit couldn’t commence business within the LOA validity. Describing the steps taken so far to start operations. b) A copy of the IFSCA Regulatory Approval, which can be: Letter of Authorization Certificate of Registration/Recognition Or any other form of approval. c) A copy of the Registered Lease Deed. Important: The ‘LOA Extension’ request must be submitted on the SEZ Online portal at least one month before the expiry of the LOA. Applications sent via physical documents or email are not accepted.

No. There’s no requirement to generate a SERF ID for submitting the ‘Free Form - Unit - Intimation of DCP’ request. This is because many business categories in IFSCA, such as Funds, Broker-Dealers, etc., do not typically issue invoices for commencement. In such cases, commencement is recorded based on the business nature and supporting documentation alone.

The BLUT must be filed and approved in the SEZ Online portal for the following reason: Without an approved BLUT in the SEZ Online portal, units cannot carry out transactions related to procurement of goods or services within the SEZ. Important Reminder: It has been observed that some units delay submitting the ‘New LUT’ or ‘Update LUT’ requests for weeks or even months after receiving the approved physical BLUT. Such delays can cause procedural complications and disrupt business operations. Therefore, units should immediately upload the PDF copy of the approved BLUT in the SEZ Online portal as soon as it is received via email

Failure to submit APR (or SERF) may attract monetary penalties as per the applicable law.

The application for a Letter of Approval (LOA) under the SEZ Act must be submitted through the SWIT (Single Window Interface for IFSC Transactions) portal, which has been launched by IFSCA for this purpose. The steps involved are as follows: Applicants seeking regulatory approvals from IFSCA must file a Common Application Form (CAF) through the SWIT portal. In this CAF, there’s a dedicated Section-D specifically for applying for the SEZ LOA. Once the Common Application Form (CAF) is completed and signed using a Digital Signature Certificate (DSC), the application for the SEZ LOA is automatically submitted to the SEZ Online portal from the SWIT portal. It’s important to note that while the application is submitted via the SWIT portal, all further processing of the LOA application happens entirely in the SEZ Online portal — not within the SWIT portal. So, while the application is initiated via SWIT, the final approval process for the SEZ LOA is handled through the SEZ Online portal only.

Yes. As per Rule 22(1)(v) of SEZ Rules, it is mandatory for SEZ units to have an RCMC if they wish to avail: Exemptions Drawbacks Other SEZ-related concessions

No. The applicant must rectify all deficiencies directly in the SEZ Online portal. Responses or corrections submitted by email or through the SWIT portal will not be considered.

The following documents are mandatory while executing the Lease Deed: Valid Letter of Approval (LOA): As per Rule 18(2), the Developer or Co-Developer can enter into a lease agreement only after LOA is issued. Eligibility Certificate (EC): Issued by the Administrator (IFSCA) after BLUT approval, required to avail state tax benefits like stamp duty exemption.

Yes. The portal allows units to submit or update MPRs for the previous 3 months. However, it’s strongly recommended to file the MPR every month before the due date.

No. The APR must be submitted only through the SEZ Online portal. Physical or email submissions are not accepted.

If the LOA expires without business operations commencing: i) As per Rule 19(5) of SEZ Rules, the LOA is deemed lapsed from the date of expiry. 📌 This means the unit ceases to exist as an SEZ unit. ii) Under Rule 11(5) of SEZ Rules, the Lease Deed and lease rights to the premises automatically cease to exist upon LOA expiry. iii) Additionally: Every IFSC unit must maintain a valid SEZ LOA to continue its IFSC operations. Without a valid LOA, a unit cannot conduct business, raise invoices, receive payments, or carry on any SEZ or IFSC operations. If no action is taken to extend the LOA, it may lead to monetary penalties and operational disruptions.

If the unit has not registered its Lease Deed at the time of applying for the LOA Extension: In the cover letter submitted with the ‘LOA Extension’ request, the unit must clearly explain: The reasons for not being able to register the Lease Deed. A request for condonation of delay in executing and submitting the Lease Deed. This request is placed before the Unit Approval Committee (UAC) as per Rule 18(2) of SEZ Rules. The LOA Extension request will be processed only after the UAC decides whether to condone the delay or not.

No. The LOA Extension application must be submitted only through the SEZ Online portal. Applications sent through physical mode or via email will not be entertained for processing or approval.

If a unit is unable to access the SEZ Online portal for any reason: 1. The unit should immediately contact NSDL/NDML to restore their access. 2. Contact details: Email: abhisheka@ndml.in aweinashj@ndml.in Or use the other official contact details available https://www.sezonline-ndml.com/contactus.htm Once access is restored, the unit should log in and promptly submit the ‘New LUT’ or ‘Update LUT’ request through the portal as per the prescribed process.

If a unit wants to stop operating as an IFSC unit, they cannot simply let their LOA expire. As per Rule 74 of SEZ Rules, they must formally apply for an Exit and obtain approval.

While it is strongly recommended that the unit should submit its LOA Extension request at least one month before the expiry, it is still possible to apply even after expiry. In such cases: The unit must submit the LOA Extension request in the SEZ Online portal with all supporting documents. In the cover letter, the unit must: Clearly explain the reasons for the delay in submitting the extension application. Important: If the LOA expires and no steps are taken by the unit to extend it, the entity may be subjected to monetary penalties.

The unit should follow this process: Log in to the SEZ Online portal. Submit a ‘Free Form – Broadbanding/Capacity Enhancement’ request. Attach proof of submission of the Regulatory Application to IFSCA for the new/additional services. In the request’s ‘Item Details’ tab, mention: The complete amended list of services you intend to provide, under the section called ‘Proposed for Renewed Period’. 5. Note: 📌 Applications via physical documents or email will NOT be accepted. Everything must be filed via the SEZ Online portal.

If access is lost, the unit should contact NSDL/NDML through the details on the portal or write to abhisheka@ndml.in or aweinashj@ndml.in to restore access.

i) Further extension beyond two years may be granted by Administrator (IFSCA) for one additional year, provided: The Administrator is satisfied that at least two-thirds of the business setup activities have been completed. These include: Compliances under SEZ Act (like Lease Deed execution) Key business milestones (like capital raising, Contribution Agreements, Lease Agreements for aircrafts/vessels etc.) ii) If adequate progress is not demonstrated: The authority to consider any further extension shifts to the Board of Approval (BoA) constituted by the Ministry of Commerce, Government of India. The Board of Approval (BoA) may, upon being satisfied, grant an extension for a period not exceeding one year at a time.

Once the unit submits the ‘LOA Renewal’ request on the SEZ Online portal: Any deficiencies or queries will be raised within the portal itself. The unit should log in to the SEZ Online portal, open their ‘LOA Renewal’ request from the Inbox, and check the Remarks History link for updates or remarks. Once the request is approved, the LOA validity dates will be updated automatically in the portal. The unit can download the official Form-F2 (LOA Renewal approval letter) from the SEZ Online ID of the request.

In this situation, the unit must first apply for LOA Extension through the SEZ Online portal. Commencement intimations submitted after LOA expiry will not be accepted or processed. The extension must be obtained first, and then the unit can submit the intimation of commencement.

As per Rule 2(1) of the SEZ Rules, an RCMC is a certificate issued by an Export Promotion Council (EPCES) for units in Export Oriented Units (EOUs) and Special Economic Zones (SEZs), confirming their membership.

Once the Common Application Form (CAF) is submitted and digitally signed using a Digital Signature Certificate (DSC) in the SWIT portal, the applicant will automatically receive the login credentials for the SEZ Online portal on the email address they provided in the SWIT portal.

Verification of customer identity may be conducted through the following methods: (a) Offline Verification Verification of original documents or certified true copies is permitted. For non-resident individuals, certification may be done by: An official of a bank in a FATF-compliant country; Notary Public, Court Magistrate, or Judge (outside India); Certified Public/Professional Accountant or Lawyer (outside India); Embassy/Consulate General of the individual’s home country; Any authority as may be notified by IFSCA. (Refer Guidance Note to Clause 5.4.3, Chapter 5) (b) Video-based Customer Identification Process (V-CIP) This applies for onboarding Indian nationals via secure video interaction, as per Annexure II of the Guidelines. (c) Other Methods (For Non-High-Risk Customers) These include: Verification through authorised Business Facilitators; Use of credible, publicly available sources such as: Regulatory/government websites; Trusted CDD or research reports; Verified commercial databases recognized by the customer’s home regulator.

Yes. As per Clause 1.3.10 of the Guidelines, any wire transfer where either the ordering or beneficiary institution is located in the IFSC is treated as a cross-border wire transfer, and must be reported accordingly.

The entity must select ‘International Financial Services Centre (IFSC)’ as the RE Type.

In such cases, the branch must include “IFSC” as a prefix or suffix in the 'RE Name' field. This helps clearly distinguish the IFSC branch from its onshore counterpart.

Yes. If the FME is registered with IFSCA and has appointed a Designated Director and Principal Officer in compliance with the Guidelines, the same individuals may also be designated for its Alternative Investment Funds (AIFs) to fulfill their obligations under the Guidelines.

Yes. As per Clause 1.3.10, a cross-border wire transfer includes any transfer where either the sender or receiver is located in IFSC. Thus, transactions between GIFT-IFSC and any location outside IFSC qualify as cross-border.

According to Clause 1.5 of Chapter I, every Regulated Entity must maintain an AML/CFT/KYC policy that incorporates the key elements of the Guidelines. If the existing policy already covers all essential principles of the IFSCA Guidelines, a separate policy is not needed. If the current policy does not cover the required elements, the policy must be updated and approved by the Governing Body or its authorized committee.

As per Clause 8.2 (c) and (f) of the Guidelines, the Principal Officer must: Possess appropriate seniority and authority within the Regulated Entity, and Be independent of the internal audit team and business line functions.

No. The PO under FM Regulations is responsible for managing all FME activities and is part of the business line. As per Clause 8.2(f), the PO under AML/CFT/KYC Guidelines must be independent of business functions and audits, making the same person ineligible.

No. A single registration on the FIU-IND FINGate 2.0 portal suffices, even if the RE holds more than one license, registration, recognition, or authorization from IFSCA.

If the unit is unable to commence business within one year of LOA issuance: It must apply for an extension of LOA validity to the Administrator (IFSCA). The Administrator (IFSCA), for valid reasons recorded in writing, may grant an extension. As per Rule 19(4): The extension can be given for a further period of up to two years from the original expiry date of the LOA.

Yes — but only if the individual is also the head of the Regulated Entity in the IFSC.

Three methods are allowed: a. Offline Verification: Original or certified true copies of Officially Valid Documents (OVDs). For NRIs, documents can be certified by: Bank officials in FATF-compliant countries Notary Public, Magistrate, Judge, Certified Accountant, Lawyer (outside India) Embassy/Consulate General Any authority notified by IFSCA b. Video-based Customer Identification Process (V-CIP): Applicable for Indian nationals, following Annexure II procedures. c. Other Verification Methods (Non-high-risk only): Via Business Facilitators Trusted publicly available information CDD/research reports from reliable companies Regulator-recognised databases

According to the Prevention of Money-laundering (Maintenance of Records) Amendment Rules, 2022, if a reporting entity is located in an IFSC, the head of the regulated entity may be appointed as the Designated Director.

The RE should use the license/registration/authorization number that pertains to its principal business (i.e., the primary source of revenue). In the "line of business" section, it must select all relevant business activities for which approvals have been granted by IFSCA.

Yes. Pursuant to Rule 8 of the PML Rules, 2005 and Clause 1.3.33 of the Guidelines, all financial institutions operating in IFSC are required to report cross-border wire transfers exceeding ₹5 lakh (or foreign currency equivalent) to FIU-IND.

Every unit or entity that is licensed, recognized, registered, or authorized by the IFSCA is required to: Formulate an AML-CFT-KYC policy, and Obtain formal approval for the policy either from the Governing Body or a delegated committee (as per Clause 1.5 of the Guidelines).

As per the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, every Regulated Entity (RE) is required to report the following transactions to the Director of FIU-IND: Donations/Receipts by Non-Profit Organisations (NPOs): Any donation or receipt exceeding ₹10 lakh (or equivalent in foreign currency) by or to an NPO must be reported. Suspicious Transactions: All suspicious transactions, regardless of whether they are conducted in cash, must be reported. Cross-border Wire Transfers (CBWTR): All cross-border wire transfers exceeding ₹5 lakh (or its foreign currency equivalent), where either the originator or beneficiary is in India, must be reported. Immovable Property Transactions: All purchases or sales of immovable property valued at ₹50 lakh or more, if registered or handled by the RE, must be reported.

As per Part III of Annexure-I, a Business Facilitator must: Be domiciled and regulated in a country not listed as High-Risk by FATF, or Be from a country recognised by the Government of India through an official order, treaty, or agreement. Only such persons/entities may act as business facilitators.

The process involves two steps: Register the Regulated Entity (RE). Register the Designated Director and Principal Officer of the entity. Registration Links: Portal: FIU-IND FINGate 2.0 Registration Guidance Video: Registration Process Video

For technical assistance related to the FINGate 2.0 portal, REs should contact the FIU-IND Help Desk at: 📧 helpdesk-re@fiuindia.gov.in

No. Both roles must be held by individuals within the IFSC-based Regulated Entity and not from its onshore parent.

Every Regulated Entity must report the following transactions to FIU-IND: Donations/receipts by non-profit organisations: If the amount exceeds ₹10 lakh or its foreign currency equivalent. Suspicious transactions: All suspicious activities must be reported, even if not in cash. Cross-border wire transfers: If the value exceeds ₹5 lakh or its equivalent, and either the sender or receiver is in India. Immovable property transactions: All purchases/sales of immovable property worth ₹50 lakh or more, if registered by the RE.

All Regulated Entities licensed, recognized, registered, or authorized by IFSCA must register on the FIU-IND FINGate 2.0 portal. Exception: This does not apply to Alternate Investment Funds (AIFs) managed by FMEs registered with IFSCA.

Yes. Each Regulated Entity, including branches, must register separately on the FIU-IND FINGate 2.0 portal to fulfill reporting obligations under Rule 3 of the PML (Maintenance of Records) Rules, 2005.

Yes. In line with Rule 8 of the PML (Maintenance of Records) Rules, 2005 and Clause 1.3.33 of the IFSCA Guidelines, all REs must report such transactions to FIU-IND.

The Regulated Entity should choose ‘International Financial Services Centre Authority (IFSCA)’ in the Regulator Type field.

For technical assistance on FINGate 2.0, please contact: 📧 helpdesk-re@fiuindia.gov.in

Under Clause 10.3 of the Guidelines and as required by: Rule 3 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, and Procedure under Rule 7 of the same Rules, all Regulated Entities must submit prescribed information to the Director, FIU-IND via the FINGate 2.0 portal.

Yes. As per Clause 1.3.7 of the Guidelines, a lawyer based outside India can certify OVDs in their personal capacity for non-resident individuals, including NRIs.

The Principal Officer, as designated under the IFSCA Guidelines, shall act as the Primary User for portal registration.

No. An RE with multiple licenses/registrations/recognitions from IFSCA is required to complete only one registration on the FIU-IND FINGate 2.0 portal.

The RE should furnish the registration/authorization number related to its primary business activity (i.e., main revenue-generating line). In the 'Line of Business' dropdown, select all applicable activities for which IFSCA licenses have been obtained.

As per Clause 1.2 of Chapter I of the Guidelines, these are applicable to: Every Regulated Entity (RE) licensed, recognized, registered, or authorized by the International Financial Services Centres Authority (IFSCA). REs authorized by IFSCA only to the extent specified in the Guidelines. The Financial Group of the Regulated Entity, as detailed in Chapter XII of the Guidelines.

Yes. Each branch functioning as a Regulated Entity must register individually on the FIU-IND FINGate 2.0 portal to fulfill its reporting obligations under Rule 3 of the PML (Maintenance of Records) Rules, 2005.

As per Part III of Annexure-I (Guidance Note, Point 4), a Business Facilitator may be authorised by a Regulated Entity only if they meet the following conditions: They are domiciled in a country that is not listed by the FATF as a “High-Risk Jurisdiction subject to a Call for Action”; Alternatively, they may be from a jurisdiction that has been specifically permitted by the Government of India via treaty, agreement, or official notification. Only such qualified persons or entities may act as Business Facilitators under the Guidelines.

Yes. As per Clause 1.3.7 of the Guidelines, lawyers based outside India may certify OVDs for non-resident individuals in their personal capacity.

No. Both roles must be held by natural persons (i.e., actual individuals). Legal or juridical entities (e.g., companies) cannot be designated.

No. The Designated Director and Principal Officer must be two different individuals.

As per Clause 1.3.20 of the Guidelines, the Governing Body is the key authority responsible for approving the AML/CFT/KYC policy of a Regulated Entity, depending on the type of entity: Company: Board of Directors Partnership Firm: Partner(s) LLP (Limited Liability Partnership): Partner(s), including Designated Partner(s) Trust: Managing Trustee(s) Unincorporated Association/Group of Individuals: Committee of management or person(s) managing its affairs Branch of a Regulated Entity: A committee at the branch level, subject to authorization by the parent entity's Governing Body

Under the LRS, any person living in India — even minors — can send up to USD 2,50,000 per financial year (April to March) abroad for certain allowed purposes. This money can be used for: Personal travel Education Medical treatment Buying property abroad Investments abroad Any other permitted current or capital account transactions ✅ Key points: The scheme started in 2004 with a limit of USD 25,000 and has increased over time. If a minor is sending money, their natural guardian must sign the LRS declaration form. This scheme cannot be used by companies, partnerships, trusts, HUFs, etc. It is only for individuals.

People or entities other than individuals (like companies, firms, institutions) can send money abroad under the following limits and conditions: ✅ 1. Donations A company or organization can donate up to the lower of: 1% of its foreign exchange earnings over the last 3 financial years, or USD 5 million ➡️ The donations can be for: Setting up academic chairs in top educational institutions Giving to non-investment funds run by educational institutions Supporting technical institutions, associations, or bodies in the field the company works in ✅ 2. Commission to overseas agents A company can pay up to USD 25,000 or 5% of the inward remittance (whichever is less) per transaction as commission to agents abroad who help sell: Residential flats Commercial plots in India ✅ 3. Consultancy services Companies can send: Up to USD 10 million per project for infrastructure consultancy Up to USD 1 million per project for other consultancy services from outside India ✅ 4. Reimbursement of pre-incorporation expenses If a foreign entity invests in India, they can be reimbursed: Up to USD 100,000 or 5% of the investment (whichever is lower) for expenses they incurred before the company was officially set up in India. ✅ 5. Other general purposes Entities can also send up to USD 250,000 per financial year for purposes listed in Schedule III (e.g., travel, studies, medical treatment). 🔹 Any other regular current account transactions (like paying for services, subscriptions, etc.) can also be done — with no set limit — as long as the bank is satisfied with the validity of the transaction. ❗ If they want to send more than these limits, they must get RBI’s permission.

Yes, every resident individual must give their PAN (Permanent Account Number) for any transaction under LRS.

A person living in India can send up to USD 2,50,000 per financial year abroad under LRS for the following reasons: Personal travel to any country (except Nepal and Bhutan) Gifting money or donating to others abroad Going abroad for a job Emigrating (moving permanently to another country) Sending money to support close relatives living abroad Going abroad for: Business trips Attending conferences or special training Medical check-ups or treatment Accompanying a patient going abroad Medical treatment expenses abroad Studying abroad Any other valid reason that is considered a “current account transaction” but is not listed in FEMA 1999 📝 Note: Banks (called AD banks) don’t need RBI permission for most of these transactions. The bank must make sure the reason for sending money is genuine and not banned.

Yes, a resident Indian can gift money in Indian Rupees to their NRI/PIO close relative (as defined in Section 2(77) of the Companies Act, 2013) — using a crossed cheque or electronic transfer. ✅ Important Rules to Follow: 1. The gift must be sent to the NRI/PIO's NRO account The money should be credited to their NRO (Non-Resident Ordinary) account. This will be considered a valid and eligible deposit in that account. 2. The gift must be within the LRS limit The amount of the gift must be within the USD 2,50,000 limit available under the LRS per financial year. It’s the resident donor’s responsibility to ensure that: The gift is counted under LRS, and Their total remittances for the year (including this gift) do not exceed USD 2,50,000.

Yes. Banks (even those without offices in India) must get prior RBI approval if they want to: Accept deposits in their foreign branches, or Act as agents for: Foreign mutual funds, or Other overseas financial services

No, they cannot automatically send more under LRS if they’ve already used up the USD 2,50,000 limit in a year. ➡️ If such a person wants to send more money (from other income), they must apply to the RBI through their authorized bank (AD) with proper documents. RBI will then decide

No. You can send money in any freely convertible foreign currency — not just USD.

No, there are no restrictions for sending money to Mauritius or Pakistan for permitted current account transactions (like travel, studies, or medical treatment). 🚫 However, remittances are not allowed if: The country is on the FATF "non-cooperative" list, or The recipient (person or organization) is linked to terrorist activities, as per RBI guidelines.

✅ You must provide your PAN (Permanent Account Number) for all remittances under LRS — no exceptions.

There are certain things you cannot send money abroad for under the LRS. These include: 🚫 You cannot use LRS for: Buying lottery tickets, gambling, or prohibited magazines Sending money as security/margin for trading on foreign stock exchanges Buying FCCBs (Foreign Currency Convertible Bonds) of Indian companies in the foreign market Trading in foreign currencies Sending money to blacklisted countries (non-cooperative countries identified by FATF) Sending money to people or groups linked to terrorism, as informed by RBI Gifting money in foreign currency to another Indian resident for credit into their foreign account

🔸 No, banks cannot give loans or guarantees (called fund or non-fund based credit) to help residents send money abroad for capital account purposes (like investing or buying property). 🔹 However, banks can give such support for current account purposes like: Travel Medical treatment Education Living expenses abroad

No, a sole proprietor cannot send money separately under LRS for both personal and business use. Why? Because: In a sole proprietorship, the owner and the business are legally the same. So, if the individual already uses the full USD 2,50,000 LRS limit in a year, they cannot send more through their business account — it's the same person in both cases.

Yes, family members can combine their LRS limits to send money abroad, but only if each person follows the rules of the scheme. 👉 However, clubbing is not allowed for certain transactions — like: Opening a bank account abroad Making investments — unless the family member is a co-owner or co-investor For buying property abroad from a person living outside India, relatives can combine funds — if they all follow the LRS rules.

No, you don’t need prior approval from RBI to open, hold, or use a foreign currency account abroad for LRS transactions.

🔹 The RBI doesn’t give tax guidance for foreign remittances. 🔸 But the bank (Authorized Dealer) must follow Indian tax laws. So, whether Form 15CA/15CB is needed will depend on the specific tax rules related to the remittance — not RBI rules.

No, this rule only applies to capital account transactions (like investments or buying property abroad). ➡️ For current account transactions (like going abroad for travel, studies, business, etc.), there’s no need to have a one-year-old account. ➡️ Even money changers (FFMCs) can help with such transactions — but they must follow KYC (Know Your Customer) and Anti-Money Laundering rules.

Not always. Here's how it works: If you earned money (like interest, profit, or returns) from investments made abroad using LRS, you are allowed to keep and reinvest it outside India. However, if you don’t reinvest it, and you have extra or unused money, you must bring it back to India (repatriate it) within 180 days of receiving it or returning to India — whichever happens first. You must also follow any other rules under the Overseas Investment Rules, 2022 related to bringing money back to India.

❌ No, an Offshore Banking Unit in India cannot be treated the same as a foreign branch for this purpose.

No strict ratings or restrictions are given under LRS about which investments you can make abroad. BUT: You must do your own research and act wisely Your investments must follow the Overseas Investment Rules and Regulations, 2022 and any directions under it

No, it will not count under the individual partner’s USD 2,50,000 LRS limit. 🔹 That’s because an LLP (Limited Liability Partnership) is a separate legal entity from its partners. 🔹 So, if the LLP pays for the education of a partner for the benefit of the LLP, it is considered a business expense, not a personal remittance. ➡️ It will be treated as a normal current account transaction by the LLP, and there’s no limit under LRS for this.

Yes, you can send money abroad as many times as you want — there is no limit on frequency. ✅ But the total amount sent in a financial year must not go over USD 2,50,000. 🚫 Once you reach the limit, you cannot send more under LRS in the same year — even if your earlier investment returns back to India.

Before sending money abroad for capital account transactions (like investments or property), the person must: ✅ Choose one bank branch (AD) through which all such remittances will be made ✅ Maintain a bank account with that branch for at least 1 year before sending money If you’re a new customer, the bank will: Do a background check on your account and financial history Ask for: Past 1-year bank statement, or Your latest Income Tax Return or Assessment Order if the bank statement is not available You also need to: Submit Form A2, stating the purpose of sending money Confirm that the money belongs to you and won’t be used for illegal or restricted purposes

❌ No, banks are not allowed to open foreign currency accounts in India for residents under the LRS.

Yes, the bank (called an Authorized Dealer or AD) checks the purpose of the transaction based on the remitter’s declaration in Form A2. 🔍 The bank must make sure the transaction follows RBI guidelines. 📌 But the final responsibility for following the rules lies with the person sending the money.

Yes, a resident individual can give a loan in rupees to a close NRI/PIO relative (as defined under Section 2(77) of the Companies Act, 2013), by cheque or electronic transfer, but only if these conditions are followed: ✅ Conditions to Follow: 1. Interest-Free Loan The loan must be without interest. It should have a minimum duration of 1 year. 2. Within LRS Limit The loan amount must be within your USD 2,50,000 LRS limit per financial year. You (the lender) are responsible for making sure you don’t cross that limit. 3. Purpose of the Loan The loan can be used by the NRI/PIO for their personal needs or own business in India. 4. Not Allowed for Prohibited Activities The loan cannot be used for the following: Chit fund businesses Nidhi companies Agriculture or plantation work Real estate business (except townships, roads, bridges, buildings) Construction of farmhouses Trading in Transferable Development Rights (TDRs) 5. Loan Must Be Credited to NRO Account The loan amount must go into the NRO (Non-Resident Ordinary) account of the NRI/PIO. This will be treated as an allowed credit to their account. 6. Money Cannot Be Sent Abroad The loan money must stay in India — it cannot be transferred out of India. 7. Repayment of Loan The NRI/PIO must repay using: Inward remittance (money sent from abroad into India), or From their NRO/NRE/FCNR account, or By selling shares, securities, or property if the loan was against such assets.

According to Regulation 134(1): FMEs must prepare an annual report of accounts for each scheme, Along with an abridged summary, For each financial year, And submit it to IFSCA within 4 months after the financial year ends.

The applicant, along with its associate entities, controlling partners, or controlling shareholders, must provide details of: Any registrations they hold with IFSCA, Other financial sector regulators in India, and Regulators in foreign countries. This information should be given in the format provided in Annexure 04.

The application must include details about the Key Managerial Personnel (KMPs), especially: The Principal Officer, and The Compliance Officer for the proposed office in IFSC.

Under Regulation 119 of the IFSCA (Fund Management) Regulations, 2022: FMEs must keep and preserve all their books of accounts, records, and documents These must be stored in a format that allows electronic retrieval And must be kept for at least 10 years

The detailed profiles must include: Educational qualifications Certifications Professional experience These details should be filled in the format provided in Annexure 03. This helps IFSCA assess their competence and suitability.

You need to submit all documents listed in the checklists: Annexure 01 – for FME registration, and Annexure 02 – for Scheme/Fund authorization. These checklists are part of the application package.

Any entity applying for FME registration from IFSCA must submit a Net Worth Certificate as required under Regulation 8 and Schedule 2 of the IFSCA (Fund Management) Regulations, 2022. 📌 The certificate must be issued within the last 6 months before the date of application. The requirements vary based on the type of applicant: 🔹 If applying as a Branch: Submit the Net Worth Certificate of the parent entity. Also include a declaration from the parent confirming that the required net worth capital will be allocated specifically to the branch. 🔹 If applying as a Subsidiary or Standalone Entity: Submit the Net Worth Certificate of the applicant itself. Once in-principle approval is received from IFSCA, the required capital must be infused into the entity within 30 days. 🔹 If the entity is newly incorporated (less than 1 year old): Instead of a Net Worth Certificate, submit: The last 3 years' Income Tax Returns (ITRs), and ITR Acknowledgements of the promoters or partners.

Yes. A scheme or fund is allowed to borrow funds or use leverage, but it must follow the rules set out in the IFSCA (Fund Management) Regulations, 2022.

The details for making payments (such as bank details, modes of payment, etc.) are also given in the same fee circular dated May 17, 2023, updated till July 5, 2023, under F. No. 865/IFSCA/Banking/Fee Revision/2022-23.

An application is only considered complete when all required documents (as listed in the checklists in Annexure 01 and Annexure 02) are submitted. If anything is missing, IFSCA will not process the application.

If you're paying the fees in Indian Rupees (INR), use the RBI reference rate for the exact day the payment is made. 📌 You can check the rate here: 🔗 RBI Reference Rate Archive

A UBO is the real person who: Ultimately owns or controls the applicant, or On whose behalf a transaction is being made, or Exercises final control over a company or other legal entity.

If the applicant is a newly formed entity with less than 1 year since incorporation, and doesn't have financial statements yet, then: Submit the last 3 years' Income Tax Returns (ITRs) and ITR Acknowledgements of the partners or promoters of the applicant. If the promoters or partners are non-residents or foreign citizens, they can instead submit a declaration from: A Chartered Accountant (or equivalent professional), or Their banker, confirming that they meet the required Net Worth criteria.

The Detailed Business Plan is needed to show what the applicant plans to do as an FME in IFSC. It should clearly explain: What kinds of funds or schemes the applicant will launch from GIFT IFSC, and How they plan to implement those activities (step-by-step roadmap)

For each UBO, the applicant must submit: Their personal details, and Self-attested KYC documents (like ID proof, address proof, etc.).

Along with the maximum leverage amount, the Placement Memorandum must also explain: How the leverage is calculated (i.e., the method or formula used). This helps keep the process transparent and easy to understand for investors.

Send the application and annexures by email to: 📧 applications@ifsca.gov.in Also, send copies (CC) to: mihir.upadhyay@ifsca.gov.in singh.jasmeet@ifsca.gov.in singh.kanika@ifsca.gov.in jain.p@ifsca.gov.in

You need to make certain payments as part of the FME registration and Scheme/Fund authorization process. All payment types and details are mentioned in the IFSCA fee circular dated May 17, 2023, with updates up to July 5, 2023, under F. No. 865/IFSCA/Banking/Fee Revision/2022-23. 👉 You can access the circular from the official IFSCA website.

The documents should be submitted in digital format that is readable and searchable. In addition, a physical copy can also be sent to the IFSCA office at GIFT IFSC.

Yes. The maximum amount of leverage a scheme or fund plans to take must be clearly mentioned in the Placement Memorandum.

You must submit your audited financial statements for the last 3 years. These can be either: Standalone or Consolidated, depending on the applicant’s structure. The statements must clearly show: Total revenue Profit from operations Net worth

You can find the required application forms under the “Application Process” tab on the IFSCA website: 👉www.ifsca.gov.in

Controlling Shareholders are individuals who have significant influence over the company. This usually means owning more than 5% of the company’s shares.

The documents you need to submit depend on the type of legal entity applying for registration: a) If the applicant is a Company: Certificate of Incorporation (CoI) Memorandum of Association (MoA) Articles of Association (AoA) b) If the applicant is a Limited Liability Partnership (LLP): Certificate of Incorporation (CoI) LLP Agreement c) If the applicant is a Trust: Indenture of Trust

FMEs and schemes can use any of the following accounting standards: Indian GAAP, IND AS, IFRS, US GAAP, or Any other standard allowed by the law.

If IFSCA asks for more details or raises questions about your application, you must respond within 15 working days. If you don’t reply in time, IFSCA will send you a reminder. If you still don’t respond within 7 working days after the reminder, your application may be rejected by IFSCA.

The PPM is a crucial document and must include the following important sections and details: A visual diagram showing the structure of the fund. Any past disciplinary actions against the Fund Management Entity (FME) or the Trustee (if the fund is set up as a trust). A clear distribution waterfall — this explains how returns will be shared among investors. The FME Contribution clause — stating how much the FME is investing in the fund and any exemptions claimed. Full details about the Custodian (the entity safeguarding the fund’s assets). Exact definitions of the following: Initial offer period (initial closings), Final closings, and Commitment or investment period. If any investments are warehoused (held temporarily before the fund officially starts), provide full details and the timeframe for which they'll be warehoused. A clear grievance redressal clause, explaining how investor complaints will be handled.

The applicant must provide complete details of its: Shareholding structure, Capital structure, Ultimate Beneficial Owners (UBOs), and Controlling Shareholders.

The detailed business profile should describe: The history of the applicant, Its presence in the industry, Its market position, and Any other key details that help explain what the business does and its overall goals.

The IIO creates its own UIN numbering system (a method or formula). It then submits this system to IFSCA for record and regulatory tracking.

ALAE represents the direct expenses incurred in the investigation, defense, and settlement of a specific insurance claim. These costs are allocated to individual claims and form part of total reserve calculations.

As per Regulation 4(1)(e), financial assets include the following: Bonds and Debentures (including convertible): Fixed-income securities. Listed equities, warrants, preference shares: Tradable equity instruments. Securitized debts (like ABS): Structured debt instruments. Immovable property and related rights: Includes mortgages, liens, pledges. Loans against life insurance policies: Limited to the surrender value. Units of regulated pooled investments: Includes Mutual Funds, REITs, InvITs, AIFs (only Category I & II). Derivatives for hedging: Must be used strictly for risk management. Money Market Instruments (MMIs): Short-term tools like T-bills. Any other instruments notified by IFSCA.

A Reinsurance Slip is a document containing concise information about the risk being reinsured and the proposed terms of reinsurance. It must comply with risk transfer requirements and protect the ceding insurer from adverse financial impact.

Yes. As per Regulations 17(7) & 17(8), the appointments of the Principal Officer (for unincorporated IIOs) and KMPs (for incorporated IIOs) must be approved in advance by the IFSCA.

To be eligible, the person must: Be a Fellow of any professional actuarial body that's a member of the International Actuarial Association. Hold a valid certificate of practice from that body. Have at least 2 years of post-fellowship experience in the insurance industry (specific to the type of business like life, general, health, or reinsurance). Not have any past record of professional or financial misconduct. Not be working as an AA for any other insurance company at the same time. Exception: In case of a branch (unincorporated IIO), the AA of the parent company can be appointed as the AA of the IIO. Should not be doing any other job that may lead to a conflict of interest. Also, for unincorporated IIOs, the appointment of the AA should follow the rules of their home country regulator.

A Cover Note is a document issued by a reinsurer or an authorised broker that sets out the agreed terms and conditions of the reinsurance arrangement.

As per clause (m) of sub-regulation (1) of Regulation 3 of IPP Regulations, An insurance product is simply any contract of insurance that an IIO plans to sell or is already selling to a customer.

These are provisions for all reported claims as of the accounting date. Outstanding Claim Reserves include the ALAE and reflect the insurer's expected liabilities from known claims.

A grace period is a buffer time given after the due date of premium payment. During this time: The policy stays active (doesn’t lapse). The premium can still be paid without any penalty or late fee. This helps avoid accidental lapses in coverage.

As per Regulation 3(1)(s), NOF = 👉 Paid-up equity capital Free reserves Securities premium account Minus Accumulated losses Book value of intangible assets \Important: It should be based on the latest audited Balance Sheet. Any capital raised after that balance sheet should not be included.

The form you need depends on what kind of insurer you are and how you want to set up your business in IFSC (GIFT City). If setting up as a branch (unincorporated form): Form A – For Indian (re)insurers. Form B – For Foreign (re)insurers, including Lloyd’s. Form C – For a joint application by a Managing General Agent (MGA) and a foreign (re)insurer. If setting up as a company (incorporated form): Form D – For setting up as a public company or subsidiary in IFSC. 📝 Where to find the forms? All forms are available in editable format on the IFSCA website here: https://ifsca.gov.in/Pages/Contents/ApplicationProcess.

Yes, but only under certain conditions: If the premium is already paid, or If the IIO has a bank guarantee in hand, or If a deposit amount is already paid in advance (as required by IFSCA), or If it is clearly agreed in the insurance contract. 👉 Without at least one of these, the IIO can’t take the risk.

To register as an IIO, eligible companies must apply under: The IFSCA (Registration of Insurance Business) Regulations, 2021, and The IFSCA (Operations of International Financial Services Centers Insurance Offices) Guidelines. These together are referred to as the IIO Regulations and Guidelines.

You must: Fill the relevant application form (refer to Q18 above). Submit it to IFSCA as per the procedure under Regulation 4(2) of the IIO Regulations. Visit the official Application Process page for detailed instructions and document checklist. 📌 Remember: Choose the correct form based on your status (Indian or foreign entity) and how you’re setting up (branch or company). 📝 Where to find the forms? All forms are available in editable format on the IFSCA website here: https://ifsca.gov.in/Pages/Contents/ApplicationProcess.

The Board of Directors of an International Insurance Office (IIO) is responsible for appointing the AA. They must choose someone who is qualified, has the right experience, and is professionally competent for the job.

Permitted Reference: Matrix 1 under Regulation 9 Investments can be made in ULIPs, subject to applicable exposure norms. Note: Each of the above investment avenues has specific exposure limits, defined in Matrix 1.

The objective of these regulations is to specify capital adequacy and solvency margin requirements for International Insurance Offices (IIOs) engaged in General Insurance, Health Insurance, or Reinsurance business within the IFSC.

The regulations apply depending on the type and structure of the IIO: IIO incorporated in IFSC Must follow the IFSCA Investment Regulations. IIO not incorporated in IFSC May choose between: Following the parent entity’s investment norms, or Following the IFSCA Investment Regulations. Branch of Foreign Insurer or Lloyd’s India (IRDAI-registered) May choose between: Following the parent entity’s norms, or Following the IFSCA Investment Regulations.

These regulations apply to IIOs that deal directly with customers, meaning those involved in direct insurance (not reinsurance only).

There are two ways to start operations in an IFSC: Incorporated form – by registering a new company. Unincorporated form – by setting up a branch office or place of business (not a separate legal entity).

As per Regulation 5(7), IIOs are allowed to invest in the following jurisdictions, with certain conditions: 🇮🇳 IFSC (e.g., GIFT City): Freely permitted. 🇮🇳 India: Allowed under regulatory frameworks of RBI or SEBI. Home Country of Parent Entity: Permitted if compliant with the home regulator’s norms. Other Countries: Allowed only if not listed by FATF as high-risk jurisdictions (i.e., not on FATF’s blacklist).

Regulation Reference: Regulation 8(2) No. Only Central Government securities are considered sovereign debt. Not Eligible: Bonds issued by: State Governments Municipalities Provinces Public Sector Entities (PSEs) Even if rated, these are not treated as sovereign bonds under the regulations.

As per the Explanation to Regulation 2, the time to exercise the choice depends on the registration status of the IIO: Already registered IIO Must make the choice within 1 month from the notification of these regulations. New applicant (seeking registration) Must exercise the choice at the time of application for registration.

FSCA-registered IIOs (who do re-insurance business) are placed in: Category 2 (same level as Foreign Re-insurer Branches, or FRBs) under the IRDAI (Re-insurance) (Amendment) Regulations, 2023. BUT: When accepting reinsurance business from Indian insurers in Domestic Tariff Area (DTA), they must invest 100% of the retained premium back in India’s DTA.

As per Regulation 10, both IIO and IIIO must retain records for at least 7 years, or as required by other applicable laws - whichever is longer. 📅 The 7-year period is counted from: The last transaction date on the record or policy expiry date, whichever is later OR the date the claim is settled

Yes: The IIO must: Inform IFSCA at least 3 months before withdrawing the product. If it’s a general insurance product, the IIO must also inform current policyholders at least 3 months before their policy ends. Important: Even if the product is withdrawn, existing policies will remain valid until their expiry date.

Generally, no pre-approval from IFSCA is needed to sell an insurance product. However: The IIO must submit the final version of the policy document (with all terms and conditions) to IFSCA before launching the product. This includes new products or any modifications to existing products. The only exception is reinsurance products, which don’t need this filing.

An IIO (International Financial Service Centre Insurance Office) is a type of financial institution that: Is registered by IFSCA, and Is allowed to do insurance and/or reinsurance business from within an IFSC, As per the rules made by IFSCA under its regulations.

‘Sum at Risk’ is defined as: (i) If a lump sum is payable upon death or other contingency: Sum at Risk = Amount Payable − Mathematical Reserves (ii) If annuity or periodic payments are payable: Sum at Risk = Present Value of Future Benefits − Mathematical Reserves

As per the IIO Regulations, the following types of entities are eligible to apply for registration as an IIO: Indian insurers already registered with IRDAI (Insurance Regulatory and Development Authority of India) under Section 3 of the Insurance Act. Foreign insurers or foreign re-insurers. The Society of Lloyd’s (on behalf of its members). A branch office of a foreign insurer or Lloyd’s India that is registered with IRDAI. A public company or a wholly owned subsidiary of an insurer or reinsurer, formed and registered under the Companies Act, 2013. An insurance co-operative society registered under: The Co-operative Societies Act, 1912, or Any other state co-operative law, or The Multi-State Co-operative Societies Act, 1984. A foreign body corporate (not a private company) set up under the laws of another country. A Managing General Agent who has a valid binding agreement with a specific foreign insurer or foreign reinsurer.

IIOs setting up in an unincorporated form The number and roles of people you must appoint depends on how the IIO is set up—either as a branch (unincorporated form) or as a company (incorporated form): 🔹 If the IIO is set up as a branch (unincorporated form): As per Regulation 17(7) of the IIO Regulations, at least three officers must be appointed: Principal Officer – In charge of daily operations and compliance with regulations. Underwriting Officer – Handles evaluation and approval of insurance risks; must have relevant experience. Finance & Accounts Officer – Manages accounting and financial reporting; must also have relevant experience. 🔹 If the IIO is set up as a company (incorporated form): As per Regulation 17(8), minimum three Key Managerial Personnel (KMPs) are required: Chief Executive Officer (CEO) – Oversees the IIO’s overall operations. Chief Finance Officer (CFO) – Manages financial operations and compliance. Chief Underwriting Officer (CUO) – Oversees the underwriting of insurance business. ➡️ Note: IFSCA may require more KMPs in future depending on the circumstances.

Yes, but minimal. The IIO can charge up to USD 5 for acknowledging a notice of transfer or assignment of an insurance policy (even digital ones). ❌ No other fee can be charged for services under Section 38 of the Insurance Act, 1938, such as: Recording a transfer or assignment. Issuing confirmation of the same.

The main objective of these regulations is to establish a comprehensive regulatory framework for the investment of assets by International Financial Services Centre Insurance Offices (IIOs). These rules define how IIOs should manage and invest their financial and infrastructure-related assets to ensure compliance, financial prudence, and alignment with international standards.

Yes. As per Regulation 16(1)(a) of the IPP Regulations: Proposal forms can be filled either physically (paper) or digitally (electronic). This should align with the IIO’s Product Oversight and Governance Policy. Other related provisions: 📃 If filled in physical form, the IIO must digitize the data (Reg. 16(1)(c)). 📲 If the policy is to be issued electronically, and the customer opts for it, the IIO must help create an e-Insurance Account (eIA) for the customer (Reg. 16(1)(d)).

As per Regulations 13 to 15, the IIO’s business area depends on whether it deals in direct insurance or reinsurance. 🔹 If doing Direct Insurance, the IIO can serve: Clients within IFSC Clients from other SEZs (Special Economic Zones) Clients outside India Clients in India’s Domestic Tariff Area (DTA) – only if allowed under Section 2CB of the Insurance Act. 🔹 If doing Reinsurance, the IIO can serve: Cedents (insurers giving reinsurance) based in IFSC Risks from other SEZs Risks outside India Indian insurers in DTA, as per IRDAI (Re-insurance) Regulations, 2018

Any person (public or policyholder) can request to inspect returns filed by an IIO with IFSCA. 🧾 Procedure: Submit a request to IFSCA. Pay a nominal fee (🔖 up to USD 5). IFSCA will: 📅 Set a date for physical inspection, or 📄 Provide a copy of the return 🕒 Timeline: Within 30 working days from the date of fee receipt.

Yes Regulation Reference: Regulation 12 Matrix to Refer: Matrix 4 – Equity Exposure Matrix by SCR This matrix: Caps how much can be invested in equity instruments per country, based on its Sovereign Credit Rating. Aims to promote geographic diversification and limit overexposure to high-risk jurisdictions.

IBNR reserves refer to liabilities for claims that have occurred but have not yet been reported to the insurer. These typically include: Claims that are yet to be reported Claims currently in transit Reopened claims IBNR reserves also include IBNER and Allocated Loss Adjustment Expenses (ALAE).

Fronting is a reinsurance practice where an IIO retains minimal or no risk and cedes most or all of the assumed risk to a reinsurer or retrocessionaire.

A Contract of Reinsurance is a legally binding agreement between a cedant and a reinsurer, typically evidenced through a slip, cover note, or formal contract document.

Regulation Reference: Regulation 7 Requirement: Investments must be made in Investment Grade assets, rated under: ICS-RC (Insurance Capital Standards – Rating Categories) Ratings must be from agencies recognized by the IAIS only. Exception: The IFSCA may permit deviations in special cases.

Yes. To do insurance or reinsurance business in an IFSC (International Financial Services Centre), entities must follow rules from: The IFSCA Act, 2019, and The Insurance Act, 1938. Based on these laws, IFSCA (the regulatory authority) has created a full regulatory framework — including regulations, circulars, and guidelines. To start insurance/reinsurance operations in IFSC, an entity must register as an International Financial Service Centre Insurance Office (IIO) with IFSCA.

🔹 If the IIO is being set up as an incorporated company (a separate legal entity in India): As per Regulation 17(3) of the IIO Regulations and Section 6(1) of the Insurance Act, 1938, the minimum capital required is: INR 100 crore – for life or general insurance INR 100 crore – for health insurance INR 200 crore – for reinsurance However, if a Managing General Agent (MGA) or service company is being incorporated in IFSC, the minimum paid-up capital required is much lower: Only INR 5 lakh, as per Schedule II and III of the IIO Regulations. 🔹 If the IIO is being set up as a branch (unincorporated form): As per Regulation 17(1) of the IIO Regulations: It must have a minimum assigned capital of USD 1.5 million in any freely convertible foreign currency. This assigned capital must: Be earmarked and held in the applicant’s home country or country of incorporation/domicile. Be invested as per the rules of its home country regulator. Be maintained at all times for as long as the IIO registration is valid.

The AA plays a critical role in making sure the insurance company stays financially sound and follows the rules. Key duties include: Giving actuarial advice to the IIO on important financial matters. Ensuring solvency — the IIO must always have enough money to cover its risks. Making sure the premium pricing policy matches the company’s approach to accepting risks (underwriting) and paying claims. Checking whether reinsurance arrangements are strong and sufficient. Signing off on reports like the Actuarial Report and Abstract that are sent to IFSCA. Calculating reserves (money kept aside for future claims) using proper models and methods. Alerting the Board and IFSCA immediately if there is any non-compliance or other serious issue. In short: The AA is like the financial doctor of the IIO — they make sure everything is healthy, fair, and legal.

You can pay your insurance premium using any of these 4 ways: Banking channels, like online transfers or other electronic modes. Bank guarantee – a promise by a bank that it will pay the premium if the policyholder fails to do so. Cash deposit. Any other payment method allowed by IFSCA.

Every IIO is required to formulate a documented Reinsurance Strategy and Programme that aligns with its underwriting philosophy and risk management objectives. It must include the processes for reinsurer selection, monitoring, controls, roles and responsibilities, and use of reinsurance systems.

Reserves including Outstanding Claims, IBNR, IBNER, URR, and PDR must be calculated as per the methodology laid out in Schedule II of the ALSM GI Regulations. These computations ensure proper provisioning and risk coverage.

Topic: Applicable Accounting Standards Unincorporated IIOs shall prepare financial statements in accordance with the accounting framework of their parent entity, as applicable in the home jurisdiction. Incorporated IIOs are required to follow the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI), with the following specific provisions: Cash Flow Statements (AS 3): Only the Direct Method is permitted. Segment Reporting (AS 17): Applicable in full, without exemptions based on turnover or listing status. AS 13 (Accounting for Investments): Not applicable under these regulations. These requirements ensure both regulatory compliance and alignment with global best practices.

PDR is an additional reserve maintained when future expected claims and expenses exceed the Unearned Premium Reserve (UPR). It ensures that the insurer has adequate provisioning for anticipated shortfalls in premium sufficiency.

An Insurance Pool is a joint underwriting mechanism wherein multiple IIOs agree to share a predetermined portion of the risk and premium of a particular class of insurance business.

Yes Matrix to Refer: Investment Asset Exposure Matrix (Matrix 1) This matrix defines limits for: Maximum exposure to a single entity or a group of related entities. Industry- and sector-wise concentration limits. Purpose: To prevent excessive concentration risk and promote a well-diversified investment portfolio.

Yes, an Indian resident can: Take a health insurance policy from an IIO (International Insurance Office) located in GIFT IFSC. Pay the premium in foreign currency, but only if: The total amount (including the premium) is within the limit allowed under the Liberalised Remittance Scheme (LRS). This is allowed under Regulation 3 of FEMA (Insurance) Regulations, 2015.

This is a special clause in the insurance contract that: Clearly defines how and when the premium must be paid. It ensures both the insurer and policyholder follow a set payment schedule.

Yes, the Authority (IFSCA) can refuse registration, but only after giving the applicant a chance. Here's how it works: IFSCA reviews your application. If they find issues or deficiencies, they’ll notify you and give 30 days to fix them. If you don’t fix the issues to their satisfaction, they can refuse the registration. BUT – before refusing, they’ll give you a chance to submit your explanation in writing. So, IFSCA won’t deny registration without giving you a fair opportunity to respond.

Topic: Preparation and Presentation of Financial Statements Yes, all IIOs are subject to financial reporting obligations as follows: Incorporated IIOs must fully adhere to the provisions of the F&A Regulations, including prescribed accounting principles, formats, and disclosure norms. Unincorporated IIOs may prepare financial statements in accordance with their parent entity’s accounting policies, subject to overarching regulatory requirements. All IIOs, regardless of structure, are required to present financial statements in the form and manner prescribed by the International Financial Services Centres Authority (IFSCA).

According to Regulation 17(1) and Section 6(3) of the Insurance Act: 🔸 Foreign companies doing reinsurance through a branch in IFSC must show NOF of INR 1000 crores. The NOF can be shown in any freely convertible foreign currency.

While working on any insurance product, the IIO must: Understand customer needs: Design the product to suit the goals, interests, and needs of the target customers. Protect customer interest: Ensure terms and conditions are fair and do not harm customers. Avoid conflict of interest: If insurance agents or intermediaries are involved in selling the product, make sure their role doesn’t unfairly affect the product or the customer.

No. As per Regulation 7(2), once IFSCA grants the certificate of registration, it stays valid forever—unless: It is revoked or Cancelled by IFSCA due to violations or other reasons.

Every insurance product must have a Unique Identification Number (UIN). If a product is revised or updated, the new version must have a different UIN from the old one. This ensures that each version of a product is clearly identifiable.

Yes. According to Regulation 11, an IIO can do its business in any freely convertible foreign currency. However: All financial reporting to IFSCA must be done in USD, unless IFSCA says otherwise. An IIO may also have an INR account, but only to pay: Administrative expenses Statutory expenses And other purposes specified by IFSCA

Domestic Tariff Area (DTA) refers to the entire territory of India excluding the Special Economic Zones (SEZs) established under the SEZ Act, 2005.

A Reinsurance Treaty is a comprehensive contract between a cedant and a reinsurer (or a reinsurer and a retrocessionaire) defining the scope, terms, and conditions applicable to a specified class or segment of business over a defined period.

Retrocession is a subsequent reinsurance arrangement where a reinsurer further cedes a part of the assumed risk to another reinsurer, thereby acting as a cedant.

Yes, they can choose not to invest the full 100% back in India’s DTA. But if they do that, their category changes in the Order of Preference: Instead of Category 2, they will be placed in Category 3, which has lower preference when Indian insurers choose reinsurance partners.

Yes - but capped at a nominal amount. An IIO (transacting life insurance business) can charge up to USD 5 for: 📝 Registering a nomination ❌ Cancelling a nomination 🔁 Changing a nomination (Applies to both paper-based and e-insurance policies) 📌 Important notes: No other fees can be charged for nomination-related services as per Section 39 of the Insurance Act, 1938. The nomination mentioned in the proposal form and included in the policy schedule is deemed valid.

Topic: Accounting Year for IIOs For incorporated IIOs, the accounting year shall end on 31st March of every financial year. For unincorporated IIOs, the accounting year shall align with the financial year adopted by their parent entity, ensuring consistency with group-level reporting.

For the purpose of determining solvency, certain assets are assigned zero value, including: Movable or immovable property (other than financial instruments) Unrealised premiums receivable from outside India Sundry debts or balances not realised within 90 or 180 days Furniture, fixtures, leasehold improvements Fictitious or non-realisable assets All other assets must be valued in accordance with IFSCA's valuation guidelines.

Yes, it is allowed. The IIO and the policyholder can agree to a payment plan. This plan must be clearly mentioned in the contract through a premium payment warranty clause (see Q2). So, instead of one lump sum, premiums can be paid in scheduled instalments.

Regulation Reference: Regulation 8(1) Requirement: IIOs can invest in Government Bonds or Central Government Debt Instruments only if: The issuing country has an Investment Grade Sovereign Credit Rating (SCR). The SCR must be assigned by an international rating agency recognized by the IAIS (International Association of Insurance Supervisors). This requirement ensures reduced sovereign risk and promotes financial stability. Exception: The IFSCA may allow relaxations if specifically approved by the Authority.

Topic: Shareholders’ Funds For incorporated IIOs, Shareholders’ Funds are computed as: Share Capital + Reserves and Surplus (excluding revaluation and fair value reserves) − Accumulated Losses and Unamortized Expenses 🔹 For unincorporated IIOs, the term "Assigned Capital" is used in place of "Share Capital," to reflect capital allocation from the parent entity.

Permitted Reference: Matrix 1 under Regulation 9 IIOs may invest in Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs).

Topic: Objective of the Regulations The primary objective of these regulations is to establish a standardized framework for the preparation and presentation of financial statements by International Financial Services Centre Insurance Offices (IIOs). This ensures uniformity, transparency, and regulatory compliance in financial reporting across entities operating within the IFSC.

The regulations aim to specify the requirements related to: Capital Adequacy Solvency Margin Submission of the Abstract of the Actuarial Report by IIOs engaged in Life Insurance business within IFSCs.

The Solvency Ratio is a measure of an insurer’s financial strength and ability to meet its obligations. It is computed as: Solvency Ratio = Available Solvency Margin (ASM) ÷ Required Solvency Margin

No. As per the IIO Regulations: All appointed officers of the IIO (whether Principal Officer or KMPs) must be: In direct employment of the IIO (not contractors or part-timers), and Resident in India. This ensures they are present in India to manage daily operations and comply with Indian regulations.

Cession refers to the specific portion of risk that a cedant transfers to a reinsurer under a reinsurance arrangement.

Mathematical Reserves are provisions made by a life insurer to meet future policy liabilities, excluding: Liabilities already due Liabilities under deposit back arrangements with reinsurers These reserves also include provisions for adverse deviations in mortality/morbidity rates, interest rates, and expense rates.

ASM refers to the excess of admissible assets over liabilities, adjusted for specific factors. It is calculated as: ASM = Value of Admissible Assets (Form ALSM-GI-A) − Value of Liabilities (Form ALSM-GI-L) + Adjustments (as per Table IB of Form ALSM-GI-SM)

Permitted Reference: Matrix 1 under Regulation 9 IIOs are allowed to invest in equity instruments, subject to limits specified in Matrix 1.

As per Regulation 6, an IIO must maintain detailed employment records of all employees (excluding agents or salaried field workers): 🗂️ Must include: Name Employee ID number Date of appointment Designation PAN number Salary, perks, allowances, and benefits Tax-related documents Appointment & termination letters Details of any travel reimbursements — including: Purpose of journey Fare paid Allowances given

Several provisions are in place to protect the independent working of an AA: Direct reporting to IFSCA: The Board must allow the AA to directly report any non-compliance with laws or regulations to the Authority (IFSCA). Support and Resources: The IIO must provide the AA with enough resources and support to do their job properly. Reporting structure: The AA must report directly to the top executive of the IIO, or if the IIO is just a branch (unincorporated), then to the top executive of the parent company. Access to information: The AA must have full access to all relevant data and documents held by the IIO (or parent entity, in case of a branch). The AA can ask any officer or employee for information, and they must provide it.

The regulations set up the process for how insurers and reinsurers can: Get registered and Operate in an IFSC under the control of IFSCA. The guidelines provide more detailed instructions on: Daily operations, How to report to IFSCA, What formats to use, Reporting timelines, Fee structures, and other compliance matters.

Under the ALSM LI Regulations, International Insurance Offices (IIOs) engaged in life insurance business are required to submit a series of reports to the International Financial Services Centres Authority (IFSCA) to ensure financial transparency, solvency, and compliance. These reports include the following: Admissible Assets Report: A statement detailing all admissible assets held by the IIO that can be considered for solvency purposes. This must be submitted in Form ALSM-L-A (Schedule I). Liabilities Statement: A comprehensive report showing all liabilities of the IIO, including mathematical reserves related to future policyholder obligations. This is submitted in Form ALSM-L-L (Schedule II). Solvency Margin Report: This includes a set of forms that disclose the IIO’s solvency position, indicating whether it has adequate capital to meet its liabilities. These are filed in Forms ALSM-L-SM1, SM2, and SM3 (Schedule III). Actuarial Report: An annual report prepared by the Appointed Actuary that assesses the financial health, risk exposure, and policy liabilities of the IIO. This report must be submitted directly to the Authority. Valuation Certificate: A certificate from the Appointed Actuary confirming the valuation of assets and liabilities, and attesting to the IIO’s solvency margin status. Additional Reports: Any other reports or documents that the IFSCA may require from time to time must also be submitted as per the Authority's instructions. These reporting obligations are essential to ensure that IIOs maintain financial stability and operate in compliance with regulatory standards for life insurance business within the IFSC.

Permitted Reference: Matrix 1 under Regulation 9 Short-term MMIs such as T-bills are permitted investment avenues.

It’s a Board-approved document that every IIO must prepare. It outlines: How the insurance products are designed (the process and criteria). How the product is approved, monitored, reviewed, and distributed. What corrective actions will be taken if a product is found to harm the customer’s interest. 📌 In short: This policy ensures that the insurance products are customer-friendly, well-regulated, and regularly reviewed.

UPR refers to the portion of premium received that corresponds to the unexpired portion of an insurance policy. It represents future risk coverage and is treated as a liability on the balance sheet.

IIOs engaged in general or health insurance business must submit periodic reports to IFSCA, regardless of whether they are subject to solvency margin requirements. The key reporting forms are: Form ALSM-GI-A – Statement of Admissible Assets Form ALSM-GI-L – Statement of Liabilities Form ALSM-GI-SM – Statement of Solvency Margin In addition, the following must be submitted: Annual Actuarial Report prepared by the Appointed Actuary Certified Valuation of assets, liabilities, and solvency margin Any other reports as may be requested by IFSCA These reports must be submitted even if the IIO maintains capital adequacy under the laws of its home country.

Topic: Policyholders’ Funds The term Policyholders’ Funds refers to all liabilities pertaining to policyholders, including: Outstanding claims IBNR (Incurred But Not Reported) IBNER (Incurred But Not Enough Reported) URR (Unexpired Risk Reserve) PDR (Premium Deficiency Reserve) CR (Catastrophe Reserve) Any other policyholder-related liabilities, net of admissible assets This definition ensures a comprehensive approach to recognizing all potential obligations towards policyholders.

Permitted Reference: Matrix 1 under Regulation 9 Investment is allowed in Category I & II AIFs only.

As per Regulation 4(1)(h), infrastructure assets refer to investments in: Sub-sectors defined in the Harmonised Master List notified by the Department of Economic Affairs, Ministry of Finance (GoI), Gazette dated 11 Oct 2022. Examples include transportation, energy, water supply, sanitation, etc. Other examples: District heating systems (e.g., central heating plants). Market Infrastructure Institutions (MIIs) in IFSC, like exchanges and clearing corporations.

URR is the total reserve required for unexpired risks and is calculated as: URR = UPR + PDR It represents the full provision needed for coverage of risks that have not yet expired.

Investment under these regulations refers to the deployment of funds by an IIO in: 📊 Financial assets, or 🏗️ Infrastructure assets Not considered as investment under these regulations: Relinquishment of assets under administrative or judicial orders. Claims from commercial contracts involving sale of goods/services. Assets backing unit-linked/separate account liabilities (if valued via Asset Replication Approach). Government bonds not issued or guaranteed by Central Governments (e.g., state or municipal bonds).

As defined in Regulation 6, “Investible Assets” or “Investible Funds” are derived from different types of funds, depending on the type of insurance business the IIO is engaged in. For IIOs in Life Insurance Business: Shareholders’ Funds Only the part representing solvency margin is investible. Policyholders’ Funds Includes: Participating and Non-Participating funds Variable Insurance Products (incl. OYRGTA*) Non-Unit Reserves (Unit Linked business) Pension, Annuity & Group Superannuation Funds (incl. variable insurance funds) Unit Reserves of Policyholders Applicable for Unit Linked business, including variable insurance products — at market value. * OYRGTA = One Year Renewable Group Term Assurance For IIOs in General / Health / Reinsurance Business: a. Parent Entity’s Account Funds IIO may invest funds maintained by the parent company. b. Shareholders’ Funds Specifically, those representing the solvency margin. c. Policyholders’ Funds Investible at carrying value as per the applicable regulatory balance sheet.

If an insurance policy is cancelled or changed, and some premium needs to be refunded, then: The refund must go directly to the policyholder (the person who took the policy). Agents are not allowed to receive any part of this refund. ✅ Only the insured person gets the refund.

The purpose of the IPP Regulations is: To create a clear set of rules for designing and pricing insurance products by IIOs (International Financial Services Centre Insurance Offices). To ensure IIOs: Have proper systems to detect and manage risks related to insurance products. Protect policyholders’ interests during the entire life of the insurance product — from the time it's created, priced, and distributed.

The ALSM LI Regulations apply to all IIOs undertaking Life Insurance business. For unincorporated IIOs, the solvency margin requirements under these regulations do not apply. Instead, they must comply with Regulation 17(4) of the IFSCA (Registration of Insurance Business) Regulations, 2021. However, reporting requirements under these regulations are applicable to all IIOs, irrespective of their incorporation status.

As per Regulation 4(3): All records related to: Policies issued Claims filed Reinsurance transactions must be stored in data centres located within India, including GIFT IFSC.

Yes Regulation Reference: Regulations 10 & 11 Exposure limits are governed by: Matrix 2 – Based on the type of bond/debt/deposit and ICS categorization. Matrix 3 – Based on the Sovereign Credit Rating (SCR) of the country. These limits ensure geographic diversification and help in managing sovereign risk.

Yes Regulation Reference: Regulation 13 Matrix to Refer: Matrix 5 – Property & Infrastructure Exposure Matrix by SCR Purpose: To limit investment in real estate and infrastructure assets in any one country. Based on the country’s Sovereign Credit Rating. Helps mitigate real estate concentration risk across jurisdictions.

An EIA (electronic insurance account) is: “An account where a policyholder’s insurance policies are stored in digital format through an insurance repository.” It helps in: Easy tracking of policies. Online access. Better security and record-keeping.

As per Regulation 7, an IIIO must maintain employee records with more emphasis on licensing & training for insurance solicitation staff: 🗂️ Must include: Name, employee ID, date of appointment/termination Designation, qualification License/registration number and validity Training & test completion dates Renewal training dates Office/branch posting location

The Control Level of Solvency is the minimum solvency ratio that an IIO must maintain to operate compliantly. It is currently fixed at 150%. If an IIO's solvency ratio falls below this threshold, the IFSCA may initiate regulatory action under Section 64VA(4) of the Insurance Act, 1938.

Alternate Risk Transfer refers to non-traditional, structured reinsurance solutions that are tailored to address specific risk management requirements beyond conventional reinsurance methods.

Permitted Reference: Matrix 1 under Regulation 9 Investment in debt instruments is allowed within the exposure limits specified.

According to Regulation 10 of the IIO Regulations, an IIO (IFSC Insurance Office) that is registered with IFSCA can carry on the following types of insurance business: (a) Life Insurance (b) General Insurance (c) Health Insurance (d) Re-insurance However, if the IIO is set up as a branch (unincorporated form), it can only do the type of business allowed by its home country regulator.

An Appointed Actuary is a qualified actuary who is officially appointed under the rules of the IFSCA's AA Regulations. They play a key role in analyzing financial risks, setting premium pricing, and ensuring the insurance company remains financially healthy.

Applicable to policy holders only. 📝 Steps: Submit a written request directly to the IIO. Pay up to USD 5 per document (e.g., Memorandum of Association, Articles of Association, etc.). 📦 The IIO must provide the document within 30 working days of fee receipt.

To ensure that International Financial Services Centre Insurance Offices (IIOs) and International Insurance Intermediary Offices (IIIOs) maintain minimum required information for the purposes of: Inspection Investigation ➡️ under Section 33 of the Insurance Act, 1938.

Yes. As per IFSCA rules: IIOs must retain at least 50% of their total reinsurance business. That means they can retrocede (pass on to other reinsurers) only up to 50%, not more. This ensures IIOs remain responsible and hold enough risk on their books.

A cedant is an International Insurance Office (IIO) that underwrites direct insurance business and transfers (cedes) a portion of the assumed risk to a reinsurer.

Yes, policyholders can cancel or surrender their policy at any time by giving prior notice to the IIO (as per the policy’s terms and conditions). Specifically: Life & Health Insurance Policies: Must offer a "Free Look" period. This means the policyholder has a specific number of days (mentioned in the policy) to review and cancel the policy with full or partial refund of premium. General Insurance Policies: Must include: A cancellation clause (how and when cancellation is allowed). Clearly mentioned grounds and timelines for cancellation.

IFSCA can: Ask the IIO for details, documents, or justification about the product, like: Pricing Terms and conditions How the product benefits customers If IFSCA finds that: The product violates regulations, or It is not good for policyholders, Then, IFSCA can: Suspend, ask for changes, or even withdraw the product completely. Tell the IIO to immediately stop marketing the product.

No. It is not permitted under the automatic route.

Yes. The same closure procedures apply to additional offices as applicable to the main BO/LO/PO.

Yes, agents may maintain the account. However, the BO must use its designated INR account only and not route transactions through the agent’s foreign currency account.

Yes. Extension can be granted by AD banks for genuine reasons, under intimation to RBI, FED, CO Cell, Sansad Marg, New Delhi – 110001.

Yes, but only for applicants from: Bangladesh, Sri Lanka, Afghanistan, Iran, China, Hong Kong, Macau, and Pakistan They must register with the State Police. AD bank must send a copy of the approval letter to the Ministry of Home Affairs, Internal Security Division-I, Government of India, New Delhi. No such requirement exists for entities from other countries.

Yes. The format is provided in the RBI Master Directions on Reporting: Click here for Master Directions Registration must be done after AD bank approval for office establishment.

Yes, provided the bank account is re-designated as a BO account.

Yes. A separate statutory payments account with another AD bank (acting as an agency bank for taxes) is allowed.

No. Each Project Office (PO) must independently: Maintain separate books of accounts Submit AACs Fulfill closure formalities Operate a separate bank account

✅ Yes. BOs may open LCs for export/import transactions POs may open local LCs for procurement of goods for project execution

Yes, the LO can be upgraded to BO under AD bank approval, if eligible under general permission. The AD must inform the RBI, FED, CO Cell, Sansad Marg, New Delhi – 110001.

Yes. AD banks may approve such transfers.

No. A financially sound foreign entity is mandatory, and a LoC from the Indian parent is not accepted in lieu of financials.

✅ Yes, subject to: Obtaining a No Objection Certificate (NOC) from the designated AD Category I bank Remittances must be on Cash/Tom/Spot basis only Two methods for routing: 🔹 Method 1: Designated AD bank transfers INR to transaction-handling bank. Transaction-handling bank remits funds via SWIFT. It ensures KYC, documentation, and shares: SWIFT message UIN number Beneficiary details Remittance particulars 🔹 Method 2: Designated AD bank transfers INR to transaction-handling bank. Transaction-handling bank credits NOSTRO of the designated AD bank. Designated AD bank remits funds to final beneficiary.

Yes, subject to compliance with existing guidelines issued by the Department of Banking Regulation (RBI).

BO/PO (not LO) can acquire property for own use or permitted/incidental activities (not for leasing or renting). Prior RBI approval is required if the foreign entity is from: Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran, Nepal, Bhutan, China, Hong Kong, or Macau. All entities can lease property for operations up to 5 years under general permission.

No. If an LO/BO needs to open more than one account, prior approval of the RBI is required through the AD bank, with justification for the additional account.

If the AD bank notices: Adverse findings in the AAC by the auditor, or Default in submission of AACs by LO/BO, it must immediately report the matter to the Reserve Bank India

No. BOs are not permitted to open FCY accounts for regular business purposes.

Yes. AD banks can approve such applications without referring to RBI, for locations excluding the three specified sensitive regions.

🔹 Permissible Credits: Funds from the head office through normal banking channels Rupee amounts receivable under the project contract 🔹 Permissible Debits: Local expenses of the project Intermittent remittances pending winding up/completion, subject to: Chartered Accountant's Certificate confirming all liabilities (e.g., taxes) are accounted for Undertaking from PO stating remittance won't affect project completion and any shortfall will be met via inward remittance

No. UIN is not required for POs.

Yes, in many cases a non-resident can repatriate money from the sale of property in India — but there are rules and limits. Here's a simple breakdown: ✅ When you cannot freely repatriate (send money abroad): If you (or the person you inherited the property from) got the property under Section 6(5) of FEMA, you must get RBI’s approval to send the money abroad. ✅ When you can repatriate up to USD 1 million per year (including other assets): This is allowed for: NRIs or PIOs, or Foreign citizens (but not from Nepal, Bhutan, or those considered PIOs), if: They inherited the property from someone covered under Section 6(5) of FEMA, Or, they retired from a job in India, Or, they are a non-resident widow/widower and inherited the property from their Indian spouse. ✅ When NRIs/PIOs can freely repatriate sale proceeds (with conditions): They can send money abroad from selling residential or commercial property (but not agricultural land, farmhouses, or plantations) if: 1. The property was bought legally under foreign exchange laws at that time. 2. The money used to buy the property came from: Foreign currency sent through banking channels, or Money in an NRE (Non-Resident External) account, or Money in an FCNR(B) account. 3. If it’s residential property, they can only repatriate money from up to two such properties.

The usual restrictions don’t apply in the following cases: If the person is a foreign national living in India If the person bought the property before July 8, 1947 and kept it with RBI’s permission If the property is on a lease for 5 years or less

Yes. If someone is married to an NRI or an OCI, but they themselves are not an NRI or OCI — they can still buy one property in India jointly with their spouse. But there are a few conditions: The property cannot be agricultural land, farmhouse, or plantation land. They must follow the rules under Rule 25 of the FEMA (Non-Debt Instrument) Rules, 2019.

Yes. If someone bought or received property outside India while they were living abroad, they can continue to keep, own, or even sell that property after becoming a resident of India. This is allowed under Section 6(4) of FEMA. It also applies if they inherited the property from someone who lived outside India.

It depends on their nationality and where they live: Citizens of these 11 countries — Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal, Bhutan, Macau, Hong Kong, and North Korea (DPRK) — ➤ Cannot buy or sell property in India without RBI’s permission (except for leases up to 5 years). ➤ This rule does not apply to OCIs (Overseas Citizens of India). Foreigners of non-Indian origin living in India (but not from the 11 countries above) ➤ Can buy property in India. Foreigners of non-Indian origin living outside India ➤ Can lease property in India for up to 5 years. ➤ Can inherit property in India from someone who was a resident.

Payment for buying property in India must be made through proper banking channels, and all Indian taxes and duties must be paid. The buyer can use money from: Their NRE (Non-Resident External) account FCNR(B) account (Foreign Currency Non-Resident Bank) NRO (Non-Resident Ordinary) account Note: Payment cannot be made using travelers' cheques or foreign currency notes.

If a person is a citizen of Pakistan, Bangladesh, or Afghanistan, and belongs to a minority community in those countries (like Hindus, Christians, Sikhs, Parsis, Buddhists, or Jains) and is living in India on a Long Term Visa (LTV) granted by the Indian government — then: They are allowed to buy only one house in India for living in (self-use), and They can also buy one more property for doing some self-employment or business. However, this is allowed only if they follow certain rules under Rule 28 of the FEMA (Non-Debt Instrument) Rules, 2019.

A resident Indian can acquire property outside India in several ways. Here's how: 1. From another Indian who owns property abroad: You can get property as a gift, inherit it, or buy it from someone in India who legally owns property abroad under the rules that applied when they got it. 2. From someone who lives outside India (a foreign resident): You can inherit the property. You can buy it using money from your RFC (Resident Foreign Currency) account. You can buy it using money sent abroad under the Liberalised Remittance Scheme (LRS). Note: If your relatives (who also live in India) are helping, you can combine your LRS limits to buy together — as long as all of you follow the LRS rules. You can buy it jointly with a close relative who lives abroad. You can use money earned abroad or from assets you legally bought outside India earlier (except ODI—Overseas Direct Investment). 3. For companies or businesses: If an Indian company has an office abroad, it can buy property there for business use or to house its staff, but it must follow RBI’s rules for this.

Yes, foreign embassies, diplomats, and consulates can buy or sell property in India, but: They cannot buy agricultural land, plantations, or farmhouses. They must get approval from the Ministry of External Affairs, Government of India. The money used must be sent from abroad through normal banking channels.

According to Section 2(ze) of FEMA, the word "transfer" includes many different ways of passing on ownership or rights over a property. It means any of the following: Selling the property Buying it Exchanging it for something else Mortgaging it (using it as security for a loan) Pledging it Gifting it Lending it Or any other way in which you pass on the right, title, possession, or claim over the property to someone else. So, in short — "transfer" means any action that changes who controls or owns the property.

Yes. A person living in India can send money abroad under the Liberalized Remittance Scheme (LRS) to buy property outside India. If family members (who also live in India) want to pool their money together for buying a property, they can do that too — as long as all of them follow the rules of the LRS.

Yes. If the underlying transaction (by an Indian resident) requires A2 reporting for sending funds overseas, then the same A2 reporting is required even if the payment is made domestically into an SNRR account.

The AD bank maintaining the SNRR account is responsible for FETERS (R Return) reporting. Reporting depends on the nature of the transaction: Cross-border transfers (to/from offshore accounts of the SNRR holder): Reported as AD bank transfer Domestic transactions (with Indian residents): Reported based on the underlying purpose (e.g., import/export, ECB, trade credit, services) The reporting procedure follows the same rules applicable to INR Vostro accounts. Refer to A.P. (DIR Series) Circular No. 25, dated March 20, 2019 for R-Return compilation under FETERS.

No. SNRR account holders are not permitted to earn interest on account balances or through term deposits.

A. Debit to SNRR Account (Payment for Exports) When an Indian exporter receives export proceeds through debit to an SNRR account of an overseas buyer: The AD bank handling export documentation must ensure compliance with export rules and regulations under FEMA. The AD bank maintaining the SNRR account must: Conduct KYC and due diligence on the overseas client Share full transaction details (e.g., name, address, country, purpose, currency, amount, beneficiary details) with the beneficiary’s bank (Indian exporter’s bank) This enables closure of the transaction in EDPMS (Export Data Processing and Monitoring System). B. Credit to SNRR Account (Payment for Imports) When an Indian importer makes a payment by crediting the SNRR account of an overseas seller: The importer’s AD bank must ensure full compliance with import guidelines under FEMA. It must communicate full importer details to the AD bank holding the seller’s SNRR account. C. Other Transactions (ECBs, Trade Credits, Foreign Investments) In such cases, the designated AD bank of the resident Indian customer is responsible for: Full FEMA compliance Issuance of FIRC, if applicable Sharing transaction details, just as would be done for inward remittances in convertible foreign currency

For Payments Made (Debit): When making INR payments from an SNRR account to a person resident in India, the AD bank must identify it as an SNRR transaction, including details such as: Purpose code Country of origin (if applicable) This communication must reach the recipient bank via electronic or manual means. For Payments Received (Credit): When the SNRR account receives a domestic remittance, the AD bank holding the SNRR account must confirm it as an SNRR transaction (same as above). In all cases, AD banks must comply with FEMA rules, regulations, and directions applicable to SNRR transactions.

No. Trade with Asian Clearing Union (ACU) countries must comply with: Regulation 3(1)(A) and Regulation 5(1)(A) of FEMA Notification 14(R) Transactions with ACU countries must be kept separate and settled through the ACU mechanism, outside of the SNRR framework.

Yes. If the Indian branch of a foreign bank is classified as an Authorised Dealer (AD) bank, it is eligible to open a Special Rupee Vostro Account for its head office or any other branch located abroad. Subject to prior approval from the Reserve Bank of India (RBI), as is the case with all SRVA accounts.

Yes. Income earned from INR balances held in an SRVA can be repatriated, subject to: Applicable regulatory guidelines issued by RBI, and Relevant tax laws and provisions in force at the time of repatriation

The SRVA mechanism introduces the option to settle international trade in INR rather than in hard (freely convertible) currencies like USD or EUR. This arrangement is: Complementary to existing systems Aimed at reducing dependence on foreign currencies A step towards internationalizing the Indian Rupee

In such cases, the rate will be derived through a cross-currency mechanism: Most global currencies are quoted against major currencies like USD, EUR, or JPY. If INR and the partner country's currency are not directly quoted in forex markets, the exchange rate will be calculated using a common reference currency (e.g., INR/USD and LKR/USD to derive INR/LKR).

Yes. An AD bank in India can open more than one SRVA for different foreign banks located in the same partner country.

Yes. Prior RBI approval is compulsory for opening a Special Rupee Vostro Account. When applying for approval, the Indian AD bank (Authorised Dealer Category-I bank) must meet the following conditions: Should have strong financial health and business resilience Must have experience in handling trade and investment transactions Should be capable of providing related financial services Must have well-established correspondent banking relationships with banks in the partner country

No. Investment of SRVA funds in T-Bills and Government Securities does not require an FPI license for the overseas account holder (correspondent bank).

Yes. The funds held in an SRVA can be repatriated based on the nature of the underlying transaction: For example, in the case of import payments, the balance in the SRVA can be transferred: In a freely convertible currency (like USD or EUR), or In the domestic currency of the beneficiary trading partner country (e.g., LKR or RUB) This flexibility aligns with the purpose for which the funds were originally credited to the SRVA.

The SRVA is part of a new framework introduced to enable international trade settlements in Indian Rupees (INR) as an additional mechanism to the existing methods that rely on freely convertible currencies. Key difference: While regular Rupee Vostro accounts can be opened without prior approval, SRVAs require prior approval from the RBI before being opened.

The SRVA mechanism provides a major benefit by enabling settlement of international trade transactions in Indian Rupees (INR). Key advantages for Indian exporters/importers: Reduces exchange rate fluctuation risk Lowers transaction costs Simplifies payment settlements, especially with trading partner countries experiencing dollar or hard currency shortages

Correspondent banking refers to a relationship where one bank (usually in one country) acts on behalf of another bank (typically foreign) to: Facilitate wire transfers Execute trade transactions Accept deposits Process documents This setup enables domestic banks to conduct international transactions without needing to open branches abroad.

Yes. A foreign bank (correspondent bank) is allowed to maintain multiple SRVAs with different AD banks in India.

Surplus balances in an SRVA may be invested in: Government Treasury Bills (T-Bills) Government Securities As per RBI’s extant investment guidelines and prescribed limits Other forms of investment may also be explored, subject to mutual agreement between the countries involved and strict compliance with all applicable regulatory and statutory provisions.

The Authorised Dealer (AD) bank in India is fully responsible for: Reporting all cross-border transactions executed through the SRVA of the foreign correspondent bank Ensuring FEMA compliance, including documentation and purpose codes

The exchange rate will be market-determined, based on prevailing forex market practices, just as with other international currency pairs.

The SRVA is primarily a bank-to-bank arrangement, functioning similarly to correspondent banking relationships. It is not a direct country-to-country framework. It involves Indian AD banks and foreign correspondent banks in partner countries.

Yes. SRVA balances represent foreign exchange inflows converted into INR and may be used for: Permissible current account transactions Permissible capital account transactions, including Foreign Direct Investment (FDI) and External Commercial Borrowings (ECB) All such usage must be in accordance with the Foreign Exchange Management Act (FEMA) framework.

No. Existing Rupee Vostro Accounts cannot be reclassified as Special Rupee Vostro Accounts. A new SRVA must be separately approved and opened under the specific guidelines issued by RBI.

Yes. INR exposures from SRVA balances can be hedged, depending on: The nature of the underlying transaction Applicable RBI guidelines on hedging and derivatives This allows foreign banks to manage currency risk effectively.

No. The SRVA mechanism is not targeted at any specific country. It is part of India’s broader strategy to promote the international use of INR in a calibrated and phased manner.

To open an SRVA, the AD bank must apply to RBI with a proposal that includes the following: Details of the arrangement between the Indian AD bank and the foreign correspondent bank, including the flow of funds. A brief profile of the foreign bank seeking the SRVA facility. A copy of the request letter from the foreign correspondent bank addressed to the Indian AD bank. A confirmation from the AD bank stating: Due diligence has been conducted in line with RBI’s KYC Master Directions (dated February 25, 2016, as amended). The foreign bank is not from a high-risk jurisdiction listed by FATF for countermeasures. The AD bank will strictly comply with RBI’s guidelines as per A.P. (DIR Series) Circular No. 10 dated July 11, 2022 for all transactions in the SRVA. Financial details of the foreign bank must be gathered beforehand by contacting RBI via email at: fedcotrade@rbi.org.in These details must be included in the final proposal submitted to RBI.

Remittance of assets refers to the transfer of funds outside India, representing proceeds from the following: Deposits with a bank, firm, or company Provident fund balances Superannuation benefits Insurance claim or maturity proceeds Sale proceeds of: Shares Securities Immovable property Or any other asset held in India

A person is not permanently resident in India if they are here for: Employment of specified duration, or A specific job assignment not exceeding three years

As per Section 2(v) of FEMA, 1999: A resident is a person who resides in India for more than 182 days during the previous financial year, excluding those who: Leave India for: Employment abroad Business or vocation abroad Any purpose indicating an intention to stay abroad for an uncertain period Come to India: Other than for employment, business, or for a stay with an intention to reside here for an uncertain period The burden of proof of residential status lies on the individual.

Yes. All remittances are subject to applicable Indian taxes. Authorized Dealer (AD) banks must ensure that tax obligations are fulfilled before remittance.

RBI approval is mandatory in these cases: 1. If remittance exceeds USD 1 million per financial year: On account of inheritance, legacy, or bequest to a foreign citizen (resident outside India) By NRI/PIO from: NRO account balances Sale proceeds of assets Assets acquired via inheritance/legacy 2. If non-remittance would cause undue hardship to the person concerned.

No, banks are not required to enter into an ISDA (International Swaps and Derivatives Association) agreement with RBI for executing these swap transactions.

Yes, maturing FCNR(B) deposits can be renewed and considered as fresh deposits under the swap facility only if: They are renewed at maturity for a minimum tenor of three years, and They have a lock-in period of one year. Only then will such renewed deposits qualify for the RBI swap window.

Yes, but with conditions: As mentioned earlier, banks must approach RBI for unwinding (cancelling) the swap when the related FCNR(B) deposit is prematurely withdrawn. However, while the swap with RBI is still being processed for cancellation, banks may temporarily arrange USD funds from other permitted foreign currency sources to manage the outflow.

Yes, these exposures to RBI are exempted from capital adequacy requirements. This means: Even though the swap might consume risk limits and appear as a large exposure, No additional capital is required to be set aside for these RBI swap transactions.

Yes, if the underlying FCNR(B) deposit is prematurely withdrawn, the bank must approach RBI to cancel the corresponding swap. However, for operational ease: The cancellation may be carried out once a threshold amount of such withdrawals is reached. This threshold will be determined by RBI and communicated to the bank when the bank approaches RBI for swap cancellation.

A bank can approach RBI once it mobilizes at least USD 1 million worth of eligible FCNR(B) deposits. Normally, banks are expected to enter into swap transactions with RBI once a week. This should be done in consultation with the Financial Markets Department of RBI.

The swap provided by RBI is a simple foreign exchange buy/sell swap, which includes the following: RBI buys the foreign currency at the time the deposit is mobilised and sells it back at maturity. The swap covers only the principal amount of the deposit. The interest component is excluded from the swap arrangement.

Yes, banks are permitted to: Offer loans abroad to the FCNR(B) account holder, and Mark a lien on such FCNR(B) deposits as security. For detailed guidelines, refer to RBI's FAQ titled “Features of Various Deposit Schemes Available for Non-Resident Indians”, updated on September 13, 2013, available at this link: RBI FAQ on NRI Deposit Schemes

No, a bank cannot terminate the swap unless the underlying FCNR(B) deposit(s) has been prematurely withdrawn.

Only fresh FCNR(B) deposits mobilised on or after September 6, 2013, in any permitted foreign currency, are eligible for the swap facility with RBI, provided the following conditions are met: The deposit must have a minimum maturity of three years. It must have a lock-in period of one year. Banks are allowed to raise other types of FCNR(B) deposits as specified in: RBI Master Circular on Interest Rates on FCNR(B) Deposits dated July 1, 2013, and Circular DBOD.Dir.BC.38/13.03.00/2013-14 dated August 14, 2013. However, such other deposits will not be eligible for swap with the RBI. To ensure clarity and compliance, banks must maintain separate ledgers for: FCNR(B) deposits eligible under the swap window, and Other FCNR(B) deposits. Additionally, a proper audit trail of all transactions must be maintained.

When a bank cancels the swap because the related deposit was withdrawn prematurely: The swap will be re-priced as per the illustration provided at the end of the full FAQ document. This ensures transparency and consistency in cost adjustment.

No, it is not mandatory. Banks are free to set their own interest rates on FCNR(B) deposits, as long as they stay within the ceiling limits prescribed under the current RBI guidelines. Refer to: RBI Circular DBOD.Dir.BC.38/13.03.00/2013-14 dated August 14, 2013 for applicable rules.

Yes, under the following condition: If the original deposit had a minimum tenor of 3 years with a 1-year lock-in period, the bank may still avail the swap. This situation arises when a bank takes time to accumulate at least USD 1 million in eligible deposits (the minimum swapable amount). In such cases, RBI allows swaps for slightly less than 3 years, based on the residual maturity of the deposit at the time of approaching RBI.

The swap tenor will be: Three years or more, matching the tenor of the underlying FCNR(B) deposits. When requesting the swap, the bank must: Specify the exact tenor in number of days in its request to RBI.

The swap cost of 3.5% will be: Compounded semi-annually (i.e., every six months) Applied for the entire tenor of the swap This means the 3.5% is not just a flat annual rate but will be compounded over the swap duration at six-month intervals.

If the FCNR(B) deposits are mobilised in other permitted foreign currencies (non-USD): The bank must convert the amount into USD equivalent at the prevailing market rate on the day of the swap deal. The bank should follow a consistent currency conversion policy, and Maintain proper documentation and audit trails of the conversion method used.

For non-resident (foreign) parties, the bank should follow the specific instructions given in paragraph 2 of the RBI circular. The rule about reporting LEI for all transactions once a person gets an LEI is mainly for Indian entities.

If a customer has done any foreign transaction worth ₹50 crore or more through an AD bank on or after October 1, 2022, then the bank must start reporting the customer's LEI (Legal Entity Identifier) for all future foreign transactions, no matter how small they are. Also, if the bank already has the LEI of a customer, it should use it for all cross-border transactions — even if the customer hasn't done a ₹50 crore transaction.

No. The RBI circular doesn’t give any instructions about where to mention the LEI in the SWIFT message format.

In such cases, the bank must check and comply with LEI rules at the time of issuing the facility itself — not later.

Yes. If any money is going between a resident and a non-resident, then it comes under the Foreign Exchange Management Act (FEMA). So, the LEI rules mentioned in the circular will apply.

Yes, the correspondent bank (which helps with the transaction but is not the main bank) is responsible for collecting the LEI of the foreign party. Again, it should follow paragraph 2 of the RBI circular for details.

Even in complex deals like merchanting trade, each payment involves only two parties. So, for each step, the AD bank should collect the LEI for the party involved in that particular part of the transaction, as per the rules in the circular.

Answer: Some of the foreign currency accounts that can be opened by resident individuals with an Authorised Dealer bank in India, along with their features are given below: 1. EEFC Account (Exchange Earners' Foreign Currency Account) This account can be opened by individuals or entities that earn foreign currency through exports or other qualifying sources. It is a non-interest-bearing current account maintained in foreign currency, allowing exporters to hold their earnings without converting them into INR. Joint accounts are permitted with eligible individuals or close relatives as per RBI guidelines. Funds that can be credited into an EEFC account include export income in foreign currency, advance payments for exports, repayments from foreign buyers, professional fees earned abroad, unused foreign currency brought back into India, interest earned on existing balances, and income from foreign branches of Indian startups. Debits from this account are allowed for all legal transactions within or outside India, including payments for goods, customs duties, and business-related loans or advances. 2. RFC(D) Account (Resident Foreign Currency – Domestic Account) Any Indian resident is eligible to open an RFC(D) account. This is a current account in foreign currency, and like the EEFC account, it does not earn any interest. Joint accounts are permitted with any eligible person. The account can be credited with foreign currency earned by the account holder or received from visiting foreigners, leftover travel money, gifts from close relatives in foreign currency, export earnings, royalties, sale proceeds of shares held abroad, and insurance claims in foreign currency. The account allows unrestricted debits for any legal transaction either in India or abroad. 3. RFC Account (Resident Foreign Currency Account) This account is available to Indian residents who have returned to India after staying abroad and want to hold their foreign currency earnings in India. It can be opened as a current, savings, or fixed deposit account, and unlike the EEFC or RFC(D) account, it may earn interest—subject to the bank’s policies. Permissible credits include pension, salary, or gifts received from abroad, proceeds from the sale of assets or property held overseas, gifts or inheritances from relatives residing abroad, old foreign income (prior to 1947) with RBI approval, insurance proceeds, and balances from NRE or FCNR accounts upon the individual becoming a resident. There are no restrictions on withdrawals—the funds can be freely used within or outside India for any legal purpose.

Yes, if the underlying FCNR(B) deposit is prematurely withdrawn, the bank must approach RBI to cancel the corresponding swap. However, for operational ease: The cancellation may be carried out once a threshold amount of such withdrawals is reached. This threshold will be determined by RBI and communicated to the bank when the bank approaches RBI for swap cancellation.

A Foreign Currency Account is a bank account that holds money in a currency other than Indian Rupees, or the currencies of Nepal or Bhutan.

Yes, under the provisions of FEMA, a person who becomes a resident in India is permitted to continue maintaining a foreign currency account outside India, subject to specific conditions. This is allowed in two scenarios: The account was opened and maintained by the individual while they were a non-resident, and The account was inherited from a person who was a non-resident. In both cases, the resident is not required to close the account or repatriate the funds, provided the account and transactions comply with the regulatory framework and do not violate Indian foreign exchange laws.

In the event of the death of a person holding a foreign currency account outside India, the status of the account changes as per the Foreign Exchange Management Act (FEMA) guidelines. Specifically, if the nominee of the account is a resident in India, certain obligations must be followed. The resident nominee is required to: Close the foreign currency account, and Repatriate all the funds to India through normal banking channels, in accordance with the applicable rules and procedures. This requirement ensures compliance with FEMA provisions and proper inward remittance of foreign assets held by residents. The relevant legal framework for this requirement is laid down under: Notification No. FEMA 10(R)/(1)/2016-RB dated June 1, 2016, G.S.R. No. 570(E) dated June 1, 2018, G.S.R. No. 160(E) dated February 27, 2019, Notification No. FEMA 10(R)(2)/2019-RB dated February 27, 2019, Notification No. FEMA 10(R)(3)/2024-RB dated April 19, 2024, and Notification No. FEMA 10(R)(5)/2025-RB dated January 15, 2025.

As per Section 2(v) of the Foreign Exchange Management Act (FEMA), 1999, a person resident in India is generally defined as an individual who has resided in India for more than 182 days during the course of the preceding financial year. However, this general rule is subject to specific exclusions. An individual is not considered a resident in India if they have gone abroad: For taking up employment outside India, For carrying on a business or profession outside India, or For any other purpose that indicates an intention to stay outside India for an uncertain period. Similarly, a person who comes to India will not be treated as a resident if their purpose is not: For taking up employment in India, For carrying on a business or profession in India, or For any other purpose that indicates an intention to stay in India for an uncertain period. In addition to individuals, the following are also considered as persons resident in India: Any body corporate or other organization that is registered or incorporated in India. An office, branch, or agency in India that is owned or controlled by a person resident outside India. An office, branch, or agency outside India that is owned or controlled by a person resident in India.

Under the Foreign Exchange Management Act (FEMA), a resident Indian is permitted to open and maintain a foreign currency account outside India under specific circumstances, subject to conditions laid down by the Reserve Bank of India (RBI). Student Studying Abroad: A student who goes abroad for studies can open a foreign currency account for the duration of their stay abroad. Once the student returns to India, the account is treated under the provisions of the Liberalised Remittance Scheme (LRS). Person Visiting a Foreign Country: A resident visiting a foreign country may open a foreign currency account for the period of the visit. However, upon returning to India, any remaining funds must be brought back as per FEMA guidelines. Participation in Exhibitions or Trade Fairs Abroad: A resident individual representing an Indian business at a trade fair or exhibition abroad can open an account to receive sale proceeds of goods. The money collected must be repatriated to India within one month from the conclusion of the event. Exporter of Goods or Services: Exporters are permitted to open foreign currency accounts outside India for the purpose of receiving advance payments or full value payments for goods and services exported. Employees Receiving Salary Abroad: The following categories of employees working in India may receive their entire salary in a foreign currency account abroad: (a) Foreign citizens employed in India by a foreign company, (b) Indian citizens working in India for a foreign company, and (c) Foreign citizens working in India for an Indian company. In all these cases, the full salary can be credited to a foreign account outside India, subject to applicable tax laws and regulations. Under the Liberalised Remittance Scheme (LRS): Any resident individual who is eligible to remit funds abroad under the LRS is also allowed to open a foreign currency account outside India. This allows them to hold, invest, or manage remitted funds as per the permissible limits and uses under the scheme.

A foreign currency account in India, maintained with an authorised dealer (such as a bank licensed by the Reserve Bank of India to deal in foreign exchange), can be opened in different forms depending on the type of account holder. For individuals, the foreign currency account may be opened as a current account, savings account, or a term deposit. This provides flexibility for personal use, savings, or long-term investment in foreign currency. For non-individual entities such as companies, firms, or other organisations, the foreign currency account can be opened as a current account or a term deposit. Savings accounts are not permitted for these categories. These accounts may be held singly or jointly, but only with persons who are otherwise eligible under FEMA and RBI guidelines to open such accounts in India.

 The registration is valid for 5 years.  It can be renewed for more 5-year terms.

IFSCA has the power to: Suspend, Cancel, or Deny renewal of the registration, and may also impose penalties for violating the rules.

The institution must be recognized as a reputed educational institution in its home country (jurisdiction).

Yes, but only if: The change matches what the Parent Institution has done in its home country. It is approved by the Academic Council or similar authority of the parent. It is informed to IFSCA before being implemented.

They can offer academic courses and research programs in areas like: Financial Management FinTech Science Technology Engineering, and Mathematics (STEM)

To apply, the institution must send an application to IFSCA along with: A resolution from its governing body approving the setup of an IBC or OEC. Information about its infrastructure, faculty, academic plan, and funding. A commitment to ensure high academic quality. Proof that the degrees given at GIFT IFSC will be recognized in the home country. Its latest Quality Assurance Audit report from a recognized agency.

These regulations allow foreign universities and educational institutions to open their International Branch Campuses (IBCs) or Offshore Education Centers (OECs) in GIFT IFSC (Gujarat International Finance Tec-City). The goal is to offer high-quality education and research in India through international institutions.

An IBC or OEC cannot act as a representative office of the parent institution to promote or market outside GIFT IFSC.

 All transactions must be done in freely convertible foreign currency.  However, administrative expenses in India can be paid in Indian Rupees through a Special Non-Resident Rupee (SNRR) account.

IFSCA ensures compliance through: Regular inspections to check: Infrastructure, Academic quality, and Whether regulations are being followed. If needed, IFSCA can also appoint an Inspecting Authority to carry out a deeper check.

An IBC or OEC is not allowed to stop or suspend any course without IFSCA’s prior approval. If a course is stopped, the parent university or institution must give an alternative arrangement for the affected students.

Only foreign universities and foreign educational institutions that meet the eligibility criteria mentioned in the regulations are allowed to set up an IBC or OEC in GIFT IFSC.

Yes. IFSCA has the power to: Give clarifications, or Relax any rule, if there is a valid reason and it is justified.

 The application is checked by a Committee of Experts.  If found eligible, the institution gets in-principle approval for 180 days.  During this period, it must set up infrastructure and recruit faculty.  Final registration is given only after all requirements are met.

A foreign university must be ranked within the Top 500 in the QS World University Rankings, either: In the overall global ranking, or In the subject-wise rankings.

Yes. The Parent Entity is allowed to repatriate (send back) profits to its home country without any restrictions.

 IBCs and OECs must keep proper financial records in their declared foreign currency. They must submit an Annual Report that includes: Student admissions, Programs conducted, Fees collected, Funds repatriated, and Degrees awarded.

Yes. A FC or FU that is registered to carry out non-core activities is also allowed to do investment activities, but only for managing its own liquidity and balance sheet as part of its regular business operations. Such investment activity is considered a supporting function, and will not be treated as a core activity under the FC Regulations.

When submitting an application to register as a Finance Company (FC) or Finance Unit (FU), the business plan must include the following: (i) A detailed business profile of the applicant or its parent company. This should cover: Company’s business history, Industry presence and market position, Target customers or markets, and Any other relevant information that gives a clear picture of the company’s operations. (ii) A brief explanation of the proposed business activity in the IFSC, including: Implementation roadmap, Process flows, and Any other important details showing how the business will function. (iii) Business projections for the next three years, including: Projected balance sheet Projected income statement Projected cash flow statement Also include the assumptions used to calculate these financials. (iv) Details of the source of funds that will be used to meet the ‘owned fund’ requirement for the proposed activities. (v) The number of staff or officials that will be posted in the FC/FU.

According to the IFSCA Circular on Time Limits (dated December 26, 2023): The applicant must respond to any queries or requests for clarification within 15 days from the date of IFSCA’s communication. If no response is received, IFSCA will send a reminder. If there’s still no response within the next 15 days, the application will be considered non-compliant. In such cases, the entity must submit a new application and pay the fees again for fresh consideration.

For a Finance Company (FC): The IOM form must be filled out only by natural persons, not by companies or other body corporates. It must be separately filled and self-attested by each individual who falls under any of the following categories: Promoters Founders Directors, Partners, or Designated Partners Key Managerial Personnel (KMPs) Persons or Shareholders holding 10% or more of: Share capital, Voting rights, or Rights to distributable dividends (directly or indirectly) Beneficial Owners (in the case of a trust) Each person listed above must submit their own separate, self-attested IOM form. For a Finance Unit (FU): The IOM form is not applicable and is not required.

According to the IFSCA Fee Circular, fees can be paid through RTGS, NEFT, cheque, or SWIFT into the bank account number provided in the same circular.

The Minimum Owned Fund (MOF) depends on the type of activities the FC/FU is planning to undertake, as per the Schedule to the FC Regulations. The MOF must be in USD or any freely convertible foreign currency.

No. Even though the IFSCA may issue a Provisional Registration (PR) to give an applicant extra time to meet certain conditions, as per Regulation 3(1) of the FC Regulations, the entity can only start its business after it receives the final Certificate of Registration (CoR) from the Authority. Business activities cannot begin based on PR alone.

The prudential regulatory requirements apply only when a FC or FU is engaged in core activities. As per Regulation 4 of the FC Regulations, the key requirements are: (i) Capital Ratio (CR) The FC/FU must maintain a minimum Capital Ratio of 8%, which means its regulatory capital must be at least 8% of its risk-weighted assets. This percentage can be changed by IFSCA through notification. Detailed rules are given in the IFSCA Circular titled: ‘Computation of Regulatory Capital’ dated April 26, 2021. (ii) Liquidity Coverage Ratio (LCR) The FC/FU must maintain a proper Liquidity Coverage Ratio on a standalone basis, as required by the Authority. However, in the case of a Finance Unit (FU), the parent company may be allowed to maintain this ratio with special approval from IFSCA. Detailed guidance is in the IFSCA Circular titled: ‘Guidelines on Liquidity Risk Management for a FC/FU’ dated June 24, 2021. (iii) Exposure Ceiling (EC) The total exposure of a FC/FU to any single counterparty or a group of connected counterparties must not exceed 25% of its available eligible capital, unless it gets approval from the Authority. Rules for calculation are given in the IFSCA Circular titled: ‘Framework on Computation of Exposure Ceiling for FC/FU’ dated May 25, 2021. All the aforementioned circulars may be accessed at below link: https://ifsca.gov.in/Legal/Index/wF6kttc1JR8=

Once a Finance Company (FC) or Finance Unit (FU) receives its Certificate of Registration (CoR) from the IFSCA, it must follow these key compliance obligations: (i) Follow all the conditions mentioned in its Certificate of Registration. (ii) Follow all applicable rules and regulations issued by: IFSCA, and Any other relevant authority, including laws under: The Foreign Exchange Management Act (FEMA), The Companies Act, and Any other applicable legal or regulatory framework. (iii) Comply with the IFSCA (AML/CFT/KYC) Guidelines, 2022, which cover Anti-Money Laundering, Counter-Terrorist Financing, and Know Your Customer standards. (iv) Meet all the reporting and supervisory requirements as specified by the Authority.

The corporate governance and disclosure requirements that apply to a FC or FU are detailed in the IFSCA Circular titled: “Guidelines on Corporate Governance and Disclosure Requirements for a Finance Company” dated August 09, 2021. All FCs and FUs must strictly follow these guidelines as applicable. The said guidelines may be accessed here.

A Finance Company (FC) is a financial institution set up under Section 3(1)(c) of the IFSCA Act, 2019, and it must be separately incorporated in the International Financial Services Centre (IFSC) to carry out one or more permitted activities listed in Regulation 5(1) of the FC Regulations. However, to qualify as an FC, the following two conditions must also be met: (i) It cannot accept public deposits from either residents or non-residents, as per the FC Regulations. (ii) It must not be registered as a Banking Unit with the IFSCA. Note: The term ‘public deposit’ means any amount collected from a resident or non-resident, in any form, that is: Payable on demand, or A term deposit, and it also includes other amounts that may be notified by the Authority (IFSCA) from time to time.

In addition to its core or other non-core activities, a Finance Company (FC) or Finance Unit (FU) can also undertake the following non-core activities: Investment Advisory Services Portfolio Management Services Distribution of financial products Explanation: If an FC or FU wants to carry out any of these additional non-core activities, it must first obtain a separate registration under the relevant activity-specific regulations or frameworks issued or notified by the IFSCA.

Yes. Relaxations are available only for entities undertaking non-core activities, and for Global/Regional Corporate Treasury Centers (GRCTCs). (A) For FCs/FUs undertaking non-core activities: They are exempted from the following: Regulation 4 (prudential regulations) Regulation 8 (corporate governance and disclosure requirements) However, to avail this exemption, they must: Have a Board-approved prudential policy, and Meet the ‘Fit and Proper’ criteria set by the IFSCA. (B) For GRCTCs (Global/Regional Corporate Treasury Centers): They are exempted from prudential regulations, but only if they: Have a Board-approved prudential policy, and Fulfil the ‘Fit and Proper’ requirements set by the IFSCA. You can refer to the IFSCA Circular for more details: “Guidelines on Corporate Governance and Disclosure Requirements for a Finance Company” dated August 09, 2021.

According to Regulation 2(1)(i) of the FC Regulations, the term “owned fund” refers to: The total of: Paid-up capital, Free reserves, Share premium account balance, and Capital reserves (but only those created from the surplus on sale of assets, not from revaluation), Minus the following deductions: Any accumulated losses, The book value of intangible assets, and Any deferred revenue expenditure, if applicable. So in simple terms, owned fund = net worth, after subtracting losses, intangible assets, and expenses not yet written off.

Yes. According to Regulation 8(2) of the FC Regulations, approval is required in the following cases: For a Finance Company (FC): If there is a merger, acquisition, takeover, or change in management that results in: A change in control of at least 20% of the total share capital, or A change in control over business decisions through any agreement, → Then prior approval from the IFSCA is mandatory, along with any other requirements the Authority may specify. For a Finance Unit (FU): If there is a merger, acquisition, takeover, or change in management of the parent entity of the FU, → Then the change must be in line with the FU's registration conditions, and → Must be reported to IFSCA within 15 days of the event.

No. If a company or entity has already received a registration or authorization from the IFSCA for a particular activity under a different regulation or framework, then it does not need to apply again under Regulation 5 of the FC Regulations — even if that activity is also listed as a permissible one under the FC Regulations. So, no fresh registration is needed for the same activity if it is already approved under another IFSCA regulation.

Yes. A FC or FU can carry out multiple permissible activities, whether core, non-core, or both. However, this is subject to the rules and frameworks issued by the IFSCA. In many cases, the company will need to get separate licenses, registrations, or authorizations for each specific activity. Examples: (i) If a Finance Company is permitted to do operating leases for aircraft (a non-core activity), but also wants to distribute financial products (another non-core activity), it must register under the applicable IFSCA regulation: (a) If it wants to distribute capital market products, it must register under: ‘IFSCA (Capital Market Intermediaries) Regulations, 2021’ – for distribution of capital market products. (b) If it wants to distribute insurance products, it must register under: ‘IFSCA (Insurance Products and Pricing) Regulations, 2022’ – for distribution of insurance products. (ii) If a Finance Company is already doing lending (a core activity), and now wants to start operating leases for aircraft (a non-core activity), then it must apply for separate registration under the IFSCA Framework for Aircraft Leasing. (iii) If a Finance Company has set up a Global/Regional Treasury Centre (GRCTC) and now wants to hold equity shares in the parent company’s group entities, then the GRCTC must get separate registration under Regulation 5(1)(iii)(m) of the FC Regulations, which covers activities without customer interface. So, while multiple activities are allowed, separate approvals may be required, depending on the nature of each activity.

The application form is available on the IFSCA website under the “Application Process” tab. You can directly access it here: 👉 https://ifsca.gov.in/Pages/Contents/HowToApply The form also includes a checklist of required documents to help applicants prepare a complete application package.

In that case, the applicant may use the “Simplified Application Form for Finance Company” available at: 👉 https://ifsca.gov.in/Pages/Contents/HowToApply

A Finance Company can be established in any of the following legal forms: As a subsidiary, As a joint venture, As a newly incorporated company under the Companies Act, 2013, or In any other form that may be specified by the IFSCA from time to time.

No. The Certificate of Registration (CoR) issued to an FC or FU is not required to be renewed every year. However, the entity must still: Continue meeting the ‘fit and proper’ criteria set by the IFSCA. Inform the Authority about any major or material changes to the information originally submitted during the registration process. If the FC or FU fails to meet any of the conditions of its registration, the IFSCA may take strict action, including: Suspension, Withdrawal, or Cancellation of the registration. But before doing so, the Authority will give the entity a chance to present its side and make submissions.

A Finance Company (FC) or Finance Unit (FU) is allowed to perform the following activities under the FC Regulations: Lending in various forms such as: Loans Commitments and guarantees Credit enhancement Securitization Financial lease Buying and selling loan portfolios Investments – including subscribing to, acquiring, holding, or transferring securities or other financial instruments, as allowed by IFSCA. Factoring and forfaiting – managing and financing receivables. Buying or selling derivatives – but only as a client. Carrying out permitted activities as a Global or Regional Corporate Treasury Centre. Carrying out permitted activities as an Aircraft or Ship Lessor. Acting as an International Trade Financing Services (ITFS) Platform. Doing any permitted activity that does not involve direct interaction with customers, including functioning as a Holding Company. Any other activity that may be permitted by the IFSCA from time to time under the FC Regulations.

No. As a general rule, the applicant (proposed Finance Company or Finance Unit) is expected to comply with all applicable rules in the FC Regulations. However, if the applicant wants any relaxation or exemption, it must: Include the request within the application itself, Provide a clear justification or reason (rationale) for asking for the relaxation, and Include the approval of its Board of Directors for the request. So, exemption requests are not submitted separately before applying — they must be part of the application.

No. Meetings with IFSCA officials are not mandatory during the application process. However, based on the documents and details submitted, the Authority may decide to hold a meeting if it finds it necessary. This decision is made on a case-by-case basis at the sole discretion of IFSCA.

You should send your application and documents electronically to: 📧applications@ifsca.gov.in 📧 financecomp-queries@ifsca.gov.in (mark a copy here)

Applicants can send the application form and documents in either digital or physical format. However, IFSCA prefers a digital submission in a readable and searchable format. Additional points to keep in mind: Documents must be in English (translated and attested if needed). Supporting documents should be notarized or apostilled, wherever applicable.

If an FC/FU wants to carry out core activities, it must follow: The prudential regulations (see Q17) The corporate governance and disclosure requirements (see Q18) And the additional circulars listed below: Important Exception: If the FC/FU is undertaking core activities only to serve its own group entities, then: It is exempt from: Prudential regulations, Corporate governance norms, and Exposure limits. However, if it is a Global/Regional Corporate Treasury Centre (GRCTC), then it must still follow corporate governance norms.

To expand its range of activities under the FC Regulations, an FC/FU must follow these steps (in addition to fulfilling the conditions mentioned in questions 11, 12, and 13, if applicable): Memorandum of Association (MoA) – It must clearly allow the FC/FU to carry out the new activity it plans to undertake. Application Letter – A formal request letter must be submitted to IFSCA, signed by an authorized representative or director. Board Approval – The FC/FU must provide Board of Directors' approval supporting the proposed expansion of activities. Letter of Approval (LoA) – The FC/FU must apply to the Administrator (IFSCA) to expand the activity in its LoA and send a copy to the Authority (IFSCA), where applicable. Revised Business Plan – A new 3-year business plan must be submitted, clearly showing: The assumptions used, and The new business to be undertaken as part of the expansion. 6. Fee Payment – Since this expansion is considered a . . . . modification of the Certificate of Registration (CoR): The FC/FU must pay the applicable fees, As specified in the IFSCA Fee Circular dated May 17, 2023, and As amended from time to time. 7. Additional Documents – Any other documents requested by . IFSCA to support the application must also be provided.

Yes. The following people connected to a Finance Company (FC) or Finance Unit (FU) must not be from certain high-risk countries: Promoters or founders Group entities Directors Shareholders Ultimate beneficial owners (UBOs) — up to the level of the natural person These individuals or entities must not be from countries or jurisdictions that are identified by the Financial Action Task Force (FATF) as High-Risk Jurisdictions subject to a Call for Action, commonly known as the FATF blacklist. In addition, the FC or FU must fully follow the rules and regulations under: The Prevention of Money Laundering Act, 2002 (PMLA) PML Rules IFSCA (AML/CFT/KYC) Guidelines, 2022, as updated from time to time

The following non-core activities can be carried out as standalone business activities (i.e., independently, without needing to offer core financial services): 1. Operating lease of various products — including: Aircraft lease Ship lease Or any other type of equipment that may be specified by the IFSCA. 2. Permissible activities without customer interface — meaning services that are offered only to group entities (e.g., Holding Companies), with no direct interaction with external customers. 3. Setting up an International Trade Financing Services (ITFS) Platform. 4. Acting as a facilitator of other permissible activities, as and when allowed by the IFSCA.

An entity applying to register as a FC or FU must pay three types of fees: Application Fee – This must be paid when submitting the application. Registration Fee – This must be paid within 15 days from the date the entity is granted Provisional Registration. Recurring Fee – This must be paid within 30 days from the date the entity receives the final Certificate of Registration. If the applicant is seeking registration for multiple activities, they must pay the registration and recurring fees separately for each activity. For more detailed information on fee amounts and payment instructions, refer to: ➡️ IFSCA Fee Circular No. 865/IFSCA/Banking/Fee Revision/2022-23, dated May 17, 2023, and its updates. The same can be accessed here.

A Finance Unit (FU) is a type of financial institution defined under Section 3(1)(c) of the IFSCA Act, 2019, that is set up as a branch (not a separate company) in the International Financial Services Centre (IFSC) to carry out one or more permitted activities listed under Regulation 5(1) of the FC Regulations. To qualify as an FU, the following conditions must be met: (i) It cannot accept public deposits from residents or non-residents, as defined in the FC Regulations. (ii) It must not be registered as a Banking Unit with the IFSCA. Note: If an applicant wants to set up a Finance Unit to perform core activities, it must meet all of the following requirements: The applicant must be an incorporated entity in its home country. It must already be engaged in the financial services business. It must be regulated by a financial sector regulator in its home country. It must obtain a No-Objection Certificate (NOC) from its home regulator to set up the FU in the IFSC . However, these conditions do not apply if the applicant is setting up a Finance Unit to perform the role of a Global or Regional Corporate Treasury Centre.

Yes. If an entity is engaged in more than one core or non-core activity, it must pay the registration and recurring fees separately for each activity, as per the IFSCA Fee Circular

Yes. A Finance Company (FC) is allowed to act as a Holding Company under Regulation 5(1)(iii)(m) of the FC Regulations. This includes performing activities without any direct customer interaction, meaning the FC can offer services only to its group entities — that is, other companies related to the parent company that is setting up the IFSC-based FC. Note: A “Group Entity” refers to any arrangement involving two or more entities that are connected through any of the following relationships: Subsidiary–Parent relationship (as defined in Accounting Standard (AS) 21) Joint Venture (as defined in AS 27) Associate (as defined in AS 23) Related Party (as defined in AS 18) Use of a common brand name Equity investment of 20% or more

The applicant must submit a clear group structure diagram (also called the vertical structure) that includes: The promoters of the applicant entity. The shareholding details of each entity up to the ultimate beneficial owner (UBO), who must be a natural person. The country of incorporation of each entity shown in the structure. The type of business or activities carried out by each entity in the structure. Additional requirement for GRCTC applicants: If the applicant is setting up as a Global/Regional Corporate Treasury Centre (GRCTC), it must: Submit the complete group structure, and Clearly identify the group entities it plans to serve within that structure. For identifying what qualifies as a group entity, the applicant should refer to the definition provided in the relevant regulatory framework.

As per the IFSCA Circular titled "Time limit for disposal of Applications" dated December 26, 2023, the processing time for applications is as follows: For Finance Company (Core activities) and ITFS entities: ✅ 90 days from the date of submission of complete application, required information, and application fee. For Finance Company (Non-Core activities): ✅ 60 days from the date of complete submission. However, in general, the IFSCA aims to process and decide on all applications within 45 days. In certain cases, the Authority may also grant a Provisional Registration (PR) to give the applicant extra time to meet certain compliance conditions before final approval. The said circular can be accessed here.

Yes. The application and registration fees can be paid in INR. But all other applicable fees (such as recurring fees) must be paid in USD only. Refer to the IFSCA Fee Circular for detailed guidance.

If you are paying in INR, use the RBI reference rate from the date of payment. You can check the official RBI rates here: 👉 https://www.rbi.org.in/scripts/ReferenceRateArchive.aspx

Yes. A FC or FU involved in non-core activities is allowed to engage in derivative transactions, but only for hedging its own risks (i.e., to protect itself against financial exposures). This means it can participate in derivatives only as a client or user, not as a dealer or provider.

Yes. An entity that is already operating under a different IFSCA regulatory framework can apply to carry out a new activity under the FC Regulations. However, it must first obtain a No-Objection Certificate (NoC) from the IFSCA under its current regulatory framework. Once the NoC is received, the entity can submit a new application for registration as a Finance Company (FC) to carry out the new activity, but only if that activity is governed solely under the FC Regulations.

You can check the Master Direction No. 5 titled "External Commercial Borrowings, Trade Credits and Structured Obligations", dated March 26, 2019. It gives all the current rules and guidelines. 📌 Note: If you had taken a loan under earlier rules, those old rules will still apply to your case.

No. You can’t refinance a rupee-denominated ECB using a foreign currency ECB

Yes. As long as you follow the rules, you can use the automatic route even for ECBs that were originally approved through the approval route.

The foreign shareholder must hold a minimum equity in the Indian borrower only when the loan is being used for the following specific purposes: General corporate needs Working capital Repaying rupee loans For other purposes (which are not restricted by RBI), the lender only needs to be a recognized lender, as listed in the Master Direction (MD) paragraph 2.1.iv.

No. If a company takes a loan in Indian Rupees (called INR ECB), it cannot change it into a foreign currency loan later. Also, it cannot take on foreign currency risk by using derivative contracts or any other method.

No, the mandated reporting is not limited to extensions up to one year (for non-capital goods) or three years (for capital goods). AD banks must report all permissions granted, whether: Granted by AD banks themselves, or Granted by Regional Offices of the Reserve Bank of India, for settlement of delayed import dues, irrespective of the tenure of the extension.

Yes, AD (Authorized Dealer) banks can issue Standby Letters of Credit (SBLC) on behalf of their customers to avail short-term trade credit from overseas lenders in foreign currency. However, such SBLCs must comply with the provisions outlined in the Department of Banking Regulation Master Circular No. DBR. No. Dir. BC.11/13.03.00/2015-16 dated July 1, 2015, titled “Guarantees and Co-acceptances”, as amended from time to time.

No. You can’t use ECB funds to reimburse past spending

Yes. Even individual lenders must be from countries that follow international rules set by FATF (Financial Action Task Force) or IOSCO (International Organization of Securities Commissions).

Yes. You can refinance old ECBs using a new one under the current framework if: The borrower is still eligible under current rules. The new loan has a lower cost (all-in-cost). The remaining loan term (residual maturity) is not shortened. All current ECB rules are followed.

No. If a company’s main business is to lend money to others, that activity is not considered “working capital” under ECB rules. Also, such companies must follow any rules set by their respective regulators (like RBI, SEBI, etc.).

Yes. The new loan must be added to all ECBs raised during the financial year to check if you're within the allowed annual limit. ✅ Exception: If the new ECB is just to refinance (replace) an old one, then it won’t be counted toward that limit. ✅ Good news: The limit resets at the start of the new financial year.

It’s the average time you take to repay your loan. You can check an example of how it’s calculated here: 🔗RBI ECB Maturity Calculation PDF

No. ECB can’t be used to: Make equity investments, or Buy goodwill (which is an indirect equity investment).

No. You must calculate the average maturity period, not just the total time of the loan.

No. The cost of the ECB (interest + fees) must always stay within the allowed limit at all times. You can’t go over the limit one year and try to balance it with a lower cost later.

No. Only regular equity capital is counted. Non-convertible preference shares are not included in the equity amount.

Yes, LSF can be opted for up to three years from the due date of submission. (Ref: A.P. (DIR Series) Circular No.16 dated September 30, 2022)

Yes. But the new lender must also be a foreign equity holder as defined in the ECB rules, and all refinancing conditions must be met.

Yes, but only if: The loan is taken for project finance, and The interest and guarantee fees (like insurance) are part of the total project cost, and These costs are capitalized (added to project value).

No. If a company raises ECB in Indian Rupees, it cannot: Change that loan into a foreign currency loan, or Take foreign exchange risk by using contracts like currency derivatives. Basically, the company must keep the loan in rupees only and cannot bet on currency changes.

No, LLPs (Limited Liability Partnerships) cannot raise ECBs because they are not allowed to receive FDI (Foreign Direct Investment).

Yes. You can raise ECBs in both foreign currency and INR, as long as both are within RBI guidelines. ➡️ Note: The individual ECB limit includes both types of borrowings.

Yes. You are allowed to roll over 100% of the hedge you already have for your ECB. This is because the rules say hedging is mandatory, and continuing the hedge is allowed.

Yes. As long as it follows the current RBI overseas investment rules, ECB funds can be used to invest in JVs or WOS abroad.

Yes, LSF applies for each non-submitted ECB-2 form, even if it's a Nil return.

You must make sure the borrowing follows: The ECB guidelines, and The FEMA Borrowing and Lending in Foreign Exchange Regulations, 2018 (issued on December 17, 2018 and updated from time to time)

You must report all ECB-related transactions (like interest payments, repayments, etc.) through: Form ECB 2, which must be: Certified by the AD Category-I bank, and Submitted to RBI’s DSIM every month. ✅ Points to remember: Submit within 7 working days from the end of each month. Do not leave any column blank (mark “Nil” or “Not Applicable” if needed). If there are any changes in ECB terms, include them in the same monthly Form ECB 2. ❗ Delays or mistakes in Form ECB 2 filing may also invite penalties under FEMA.

No. People living in India cannot invest in foreign currency or INR bonds issued abroad by Indian companies. The only exceptions are: Indian banks' foreign branches/subsidiaries, or Any other entity allowed by RBI 👉 Also, any setup that tries to bypass these rules can lead to penalties under FEMA.

Before using any ECB (External Commercial Borrowing) funds: You must first obtain a Loan Registration Number (LRN) from the RBI. To do this, file a certified Form ECB with the RBI (DSIM Division, Mumbai). Ensure that: All details of the loan are filled in correctly. No column is left blank (mention “Not Applicable” or “Nil” wherever needed). If any terms of the ECB change, a revised Form ECB must be submitted within 7 days of the change. ❗ Failure to file correctly or on time can result in penalties under FEMA.

The borrower is responsible for ensuring the borrowing follows all rules. ⚠️ If you try to break or go around the rules (for example, by disguising a loan as something else), you could face penalties under FEMA.

Yes. Housing finance companies can raise ECB to lend to people for buying flats in affordable housing projects, as defined in the Government’s Harmonized Master List of Infrastructure.

No, loans in foreign currency given by Indian banks (AD Category I) from FCNR (B) accounts are not covered under the ECB framework.

No. The minimum shareholding rule must be followed for the entire duration of the loan — not just at the time the loan is signed.

Yes, the remaining ECB portion must comply with all applicable ECB guidelines.

No. ECB cannot be used to put money into an LLP.

You can use only those derivative products that are allowed under the RBI’s Master Direction on Risk Management and Inter-bank Dealings, dated July 5, 2016, and as updated. These products include things like: Forward contracts Options Swap (only if permitted by RBI rules)

Yes, but only if: The new total loan still stays within the annual limit, and All other ECB rules are followed. Also: You don’t need a new LRN (Loan Registration Number) if you're just increasing the existing loan—it’s seen as a change in terms, not a new loan.

Yes. You need to include the new loan with all your existing ECBs. 🚫Exception: If the new ECB is only to refinance an old ECB, you can skip it to avoid double counting.

Yes. If your company has losses in the Profit & Loss (P&L) account as per the latest audited financials, you need to subtract that loss from your total equity while calculating the ratio.

Yes, you can start repaying earlier. But the average maturity of the loan must still be at least 5 years.

No, FDs cannot be renewed once the maximum permitted holding period has ended.

No, not unless there are changes in the terms and conditions of the ECB.

Yes, both principal and interest can be converted into equity, subject to conditions under Para 7.4 of Master Direction No. 5.

No, unlisted companies do not have to list in India if they want to list on international exchanges. But they are free to list in both India and abroad if they choose.

Yes, Indian companies that list their shares on international exchanges must still follow all Indian laws related to issuing shares. This includes rules under the Direct Listing Scheme, SEBI Act, Companies Act, FEMA, PMLA, and other related laws and regulations.

IFSC stands for International Financial Services Centre set up under section 18 of the Special Economic Zones Act, 2005 to handle financial services in foreign currency. It is regulated by the IFSCA Act, 2019, and GIFT IFSC is the first such center in India. The main aim is to bring back India-related financial activities that currently happen outside the country ("onshore the offshore"). It also aims to build a strong global financial hub that supports both the Indian economy and international markets.

According to Para 2 of the Scheme in Foreign Exchange Management (Non-debt Instruments) Rules, 2019 No, Indian residents are not allowed to buy or sell shares of Indian companies listed on an international exchange under this scheme..

The International Financial Services Centers Authority (IFSCA), set up under the IFSCA Act, 2019, is the unified regulator for GIFT IFSC. It is responsible for the development and regulation of: Financial products, Financial services, and Financial institutions in GIFT IFSC. IFSCA has been given the powers of all four major financial regulators in India: RBI (Reserve Bank of India) SEBI (Securities and Exchange Board of India) IRDAI (Insurance Regulatory and Development Authority of India) PFRDA (Pension Fund Regulatory and Development Authority) This allows IFSCA to regulate the entire financial services market in GIFT IFSC and handle any matters related or connected to it.

The scheme helps Indian public companies—especially start-ups and tech companies—raise money from global investors, not just in India. It can lead to better valuation, more foreign investment, and new growth opportunities. Companies will have the flexibility to raise funds in India (in INR) and abroad (in foreign currency), which is useful for those looking to expand internationally.

Yes, but only in specific roles. Indian banks cannot buy (subscribe to) Rupee bonds in the primary market (first-time sale). But they can act as: Arrangers Underwriters Market makers Traders ➡️ As long as they follow RBI’s prudential rules.

The Direct Listing Scheme is allowed because of a rule added in 2020 to the Companies Act, 2013. This rule is Section 23(3), which says that certain public companies in India can sell their shares in approved foreign countries on approved foreign stock exchanges.

Unlisted public Indian companies can list their shares on international exchanges, but they must follow: The rules in the Direct Listing Scheme, The Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024, and The rules of the international exchanges (like those in GIFT-IFSC) where they want to list.

As per clause (aaa) of rule 2 of the Foreign Exchange Management (Non-debt Instruments) Rules, 2019, An international exchange means a stock exchange outside the regular Indian market, where Indian companies can list their shares under this scheme. Right now, only two exchanges are allowed: India International Exchange 2. NSE International Exchange Both are located in GIFT City (IFSC) and are regulated by IFSCA (International Financial Services Centres Authority).

Yes, sectoral caps do apply. The shares listed on international exchanges will count as foreign investment, so the company must stay within the allowed FDI limit for its sector.

The listing of Indian companies on international exchanges in GIFT IFSC must follow the rules under the IFSCA Act, 2019 and related regulations. This includes the IFSCA (Issuance and Listing of Securities) Regulations, 2021, which cover things like how to list, what disclosures to make, and ongoing compliance requirements for companies.

In GIFT IFSC, the following Market Infrastructure Institutions (MIIs) are present: 1. Two Stock Exchanges: India International Exchange (IFSC) Limited – a subsidiary of BSE Limited NSE IFSC Limited – a subsidiary of the National Stock Exchange (NSE) These exchanges provide platforms for listing and trading of securities in GIFT IFSC. 2. Clearing Corporations (for clearing and settlement of trades): India International Clearing Corporation (IFSC) Limited NSE IFSC Clearing Corporation (IFSC) Limited 3. Depository: India International Depository IFSC Limited – provides depository services for holding securities in electronic form. 4. Banking Ecosystem: GIFT IFSC also has a strong banking network with several Indian and international banks operating from different countries and regions.

Section 2(68) of the Companies Act, 2013 defines a Private company as a company that: Limits the number of shareholders to 200, Does not allow free transfer of its shares, Does not invite the public to buy its shares. Section 2(71) of the Companies Act, 2013 defines a Public Company as a company that is not private. It can invite the public to buy its shares and doesn’t have the restrictions that private companies do. Also, if a private company is a part (subsidiary) of a public company, it is treated as a public company under the law.

Yes. According to Para 1 of the Scheme in Foreign Exchange Management (Non-debt Instruments) Rules, 2019 existing shareholders are allowed to sell their shares through an Offer for Sale (OFS) during direct listing on international exchanges.

Rule 5 of Companies (Listing of equity shares in permissible jurisdictions) Rules, 2024 provide that a company shall not be eligible for issuing its equity shares for listing in accordance with these rules, in case it — Is a Section 8 company (non-profit) or a Nidhi company (for savings/lending within a group). Is a guarantee-based company that also has share capital. Has outstanding public deposits (money taken from the public that hasn’t been returned). Has a negative net worth (its debts are more than its assets). Has not repaid loans to banks, financial institutions, or bondholders – unless it fixed the default and 2 years have passed since then. Has applied for winding up or insolvency, or is facing such proceedings. Has failed to submit its annual return or financial statement on time.

As per para 2 of the Scheme in Foreign Exchange Management (Non-debt Instruments) Rules, 2019, Only “permissible holders” can invest, trade, or hold shares under the Direct Listing Scheme. A permissible holder means a person who is not a resident of India. So, Indian residents cannot invest in these shares listed on international exchanges.

No, public companies in sectors where FDI (Foreign Direct Investment) is prohibited are not allowed to issue or offer equity shares under this scheme.

Yes, there are several incentives for foreign investors (permissible holders) under the Direct Listing Scheme in GIFT-IFSC: They can earn high returns by investing in Indian companies. All transactions are in foreign currency, so there’s no currency risk. Exchanges in GIFT-IFSC have long trading hours (over 20 hours daily), making it easier for global investors. There are tax benefits, including no tax on capital gains from selling shares of Indian companies listed in GIFT-IFSC. The overall system is business-friendly and well-regulated, making it attractive for global investment.

No, Indian mutual funds (or any Indian resident) are not allowed to invest in shares of Indian companies listed internationally as per explanation 1 of para 2 of the Scheme.

Only public Indian companies can use this scheme — whether they are already listed in India or not. Right now, only unlisted public companies (not listed in India) are allowed to list their shares directly on a foreign stock exchange. SEBI is still working on the rules for listed public companies (already listed in India).

Para 3 of the Direct Listing Scheme provides that a public Indian company shall be eligible to issue equity shares in permissible jurisdiction, if- It and its key people (promoters, directors, etc.) are not banned by regulators from using the stock market. Its promoters or directors are not involved with any other company that’s banned from the market. It is not a willful defaulter (someone who purposely doesn’t repay loans). It is not being investigated under the Companies Act. None of its promoters or directors is a fugitive economic offender (someone who has run away to avoid arrest for financial crimes). Also, the foreign stock exchange may have its own extra rules.

According to the Para 2 of the Scheme in Foreign Exchange Management (Non-debt Instruments) Rules. Yes, individuals or entities from countries that share a land border with India can invest, but only with prior approval from the Government.

Yes. According to the Para 2 of the Scheme in Foreign Exchange Management (Non-debt Instruments) Rules, 2019, Yes, Non-Resident Indians (NRIs) can buy or sell shares of Indian companies listed on international exchanges under the scheme.

No, private companies are not allowed to list under this scheme. This is because private companies cannot offer their shares to the public, which is a basic rule under the Companies Act.

As per rule 4(4) of Companies (Listing of equity shares in permissible jurisdictions) Rules, 2023, the concerned unlisted public company must file its prospectus in e-Form LEAP-1 within 7 days after it is finalized and submitted to the permitted international stock exchange. This form must be filed electronically in the MCA-21 Registry for record-keeping.

The term "beneficial owner" refers to the real person who ultimately owns or controls the shares, even if they are held in someone else’s name. The definition is taken from Rule 9(1) of the PMLA (Maintenance of Records) Rules, 2005.

The Direct Listing Scheme allows Indian public companies to list their shares directly on international stock exchanges (outside India). Earlier, Indian companies could not list their shares in foreign countries. But now, under this scheme, they can do so by following some rules. This scheme is part of the Foreign Exchange rules (FEMA), and its details are given in Schedule XI of the 2019 rules.

Apart from framework provided under the Scheme and Companies Rules, 2024 issued by Ministry of Corporate Affairs, a listed public Indian company must also follow:  The rules under the Direct Listing Scheme,  The 2024 Listing Rules by the Ministry of Corporate Affairs,  SEBI’s conditions and guidelines (which are still being finalized), and  The rules of the international exchanges in GIFT-IFSC where the shares will be listed.

Yes, persons resident in Nepal and Bhutan are permitted to open Indian Rupee accounts with an authorized dealer (AD) bank in India.

A tourist who is a foreign national of non-Indian origin can open an NRO (current or savings) account in India under the following conditions: The account can be funded through remittances from abroad via banking channels or through foreign exchange brought to India. At the time of departure, the balance in the NRO account may be repaid to the account holder provided: The account was maintained for no more than six months, and The account was not credited with any local funds, except for interest accrued on the deposit.

An SNRR account is for a person resident outside India, having a business interest in India, to carry out bona fide rupee transactions. It is non-interest bearing and must comply with FEMA rules. Difference between SNRR and NRO Account

Yes, an Indian company can accept deposits from non-residents in compliance with Section 160 of the Companies Act, 2013. Such acceptance and refund of deposits will be treated as current account transactions, which can be freely undertaken without any FEMA restriction.

Foreign diplomatic missions, diplomatic personnel, and their family members in India are permitted to hold the following types of deposits: Rupee Deposits: Foreign diplomatic missions, diplomatic personnel, and their family members can open rupee deposit accounts with an Authorized Dealer (AD) bank in India. Diplomatic Bond Stores Account: Diplomatic missions and personnel can open special rupee accounts called Diplomatic Bond Stores Accounts. These accounts are meant to facilitate purchases of bonded stock from firms/companies that are granted special customs import privileges. Repatriation of funds from this account to outside India is allowed without RBI approval. Foreign Currency Accounts: Diplomatic missions, diplomatic personnel, and non-diplomatic staff (who are nationals of the foreign country and hold official passports of foreign embassies) can open foreign currency accounts in India. These can be: Current accounts Term deposit accounts Savings accounts (only for diplomatic personnel and non-diplomatic staff) These accounts can be credited through: Inward remittances Transfers from the rupee account of the diplomatic mission in India (e.g., funds collected as visa fees) Note: If foreign currency is converted into INR, it cannot be converted back into foreign currency. Funds in these accounts can be repatriated outside India without RBI approval.

A Person of Indian Origin (PIO) is a person resident outside India who is a citizen of any country other than Bangladesh or Pakistan, or such other country as may be notified by the Central Government, and satisfies any of the following conditions: a. Was a citizen of India under the Constitution of India or the Citizenship Act, 1955; b. Belonged to a territory that became part of India after 15th August, 1947; c. Is a child, grandchild, or great-grandchild of a citizen of India or of a person referred to in (a) or (b); d. Is a spouse of foreign origin of a citizen of India, or of a person referred to in (a), (b), or (c). In addition, a PIO includes an OCI (Overseas Citizen of India) cardholder as defined under Section 7A of the Citizenship Act, 1955, provided such a person is resident outside India.

Yes, a Foreign Portfolio Investor (FPI) or a Foreign Venture Capital Investor (FVCI), both registered with SEBI, can open and maintain a non-interest bearing foreign currency account in India. This is for the purpose of making investments in accordance with the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019.

A Non-Resident Indian (NRI) is a person resident outside India who is a citizen of India.

 Entities or individuals of Pakistani nationality/ownership and entities of Bangladeshi ownership require prior approval from the Reserve Bank of India (RBI) to open an account in India.  Individuals of Bangladeshi nationality are allowed to open an NRO account, provided they hold a valid visa and a valid residential permit issued by the Foreigner Registration Office (FRO)/Foreigner Regional Registration Office (FRRO).  Citizens of Bangladesh or Pakistan who belong to minority communities (Hindus, Sikhs, Buddhists, Jains, Parsis, Christians), who are residing in India and have been granted Long Term Visa (LTV) or have applied for LTV, are permitted to open one NRO account with an Authorized Dealer (AD) bank in India. This is subject to conditions under Notification No. FEMA 5(R)/2016-RB dated April 1, 2016 (as amended). The AD bank must report the details of such NRO accounts to the Ministry of Home Affairs (MHA) on a quarterly basis, per AP (DIR Series) Circular No. 28 dated March 28, 2019.

Yes, any multilateral organization (of which India is a member nation) or its subsidiary/affiliate bodies and officials in India can open deposits with an authorized dealer in India.

Resident and Non-resident acquirers can open an Escrow Account in INR with an Authorized Dealer (AD) bank in India acting as the Escrow Agent. Purpose: For acquisition/transfer of capital instruments or convertible notes in accordance with the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019, and subject to terms under Schedule 5 of the FEMA (Deposit) Regulations, 2016, as amended.

Yes, IBUs can rely on customer due diligence (CDD) carried out by a third party, as allowed under paragraph 14 of the RBI Master Direction–KYC Directions, 2016. However, such reliance is subject to conditions outlined in the Directions, such as: The third party must be regulated, supervised, or monitored. The IBU must immediately obtain necessary CDD information. The third party must be available for further information or clarification if required. While there's no fixed "prescribed list" of third parties, the reliance must be on regulated entities such as banks, financial institutions, or intermediaries complying with equivalent CDD standards.

Yes, both Indian banks (including public sector and private sector banks that are authorised to deal in foreign exchange) and foreign banks that already have a presence in India are allowed to set up an IFSC Banking Unit (IBU) in an International Financial Services Centre (IFSC), such as GIFT City.

Yes, IBUs are permitted to accept fixed deposits from non-bank entities. However: These deposits cannot be repaid prematurely within the first year. Exception: Fixed deposits taken as collateral (for availing credit facilities from IBUs) or as margin deposits in favour of an exchange may be adjusted prematurely in case of default on a loan repayment or failure to meet a margin call

Yes, deposits provided as margin in favor of an exchange may also be treated as deposits provided as margin in favor of a clearing corporation, subject to compliance with the guidelines stated in RBI Circular DBR.IBD.BC.14570/23.13.004/2014-15 dated April 1, 2015.

The permissible activities of an IFSC Banking Unit (IBU) are outlined in paragraph 2.6 of the RBI circular DBR.IBD.BC.14570/23.13.004/2014-15 dated April 1, 2015. These generally include a wide range of offshore banking activities such as lending to and accepting deposits from foreign entities, raising funds, and engaging in derivatives and trade finance. (For exact details, one must refer to the mentioned circular.)

Yes, a Person resident in India can make direct investments in a Joint Venture (JV) or Wholly Owned Subsidiary (WOS) established in an IFSC to act as a financial institution, in accordance with the Foreign Exchange Management (International Financial Services Centre) Regulations, 2015. Such investment must also comply with the Foreign Exchange Management (Transfer or Issue of Any Foreign Security) Regulations, 2004 (FEMA.120/RB-2004 dated July 7, 2004), as amended. However, Liberalized Remittance Scheme (LRS) remittances cannot be used by resident Indians to invest in the IFSC.

Yes, only regulated entities (or branches thereof) are permitted to operate in the IFSC. A financial institution or branch of a financial institution that is set up in the IFSC and is permitted/recognized by the Government of India or a regulatory authority will be treated as a ‘Person resident outside India’ under the Foreign Exchange Management (International Financial Services Centre) Regulations, 2015 dated March 2, 2015. For clarity: The term “Financial Institution” is as defined under clause 2(b) of the above-mentioned FEMA Regulations. “Regulatory Authority” includes: Reserve Bank of India (RBI) Securities and Exchange Board of India (SEBI) Insurance Regulatory and Development Authority of India (IRDAI) Pension Fund Regulatory and Development Authority (PFRDA) Forward Markets Commission (FMC) (now merged with SEBI), or Any other statutory authority empowered under Indian laws to regulate financial institutions.

Yes, the Core Settlement Guarantee Fund and the minimum capital of Clearing Corporations, if accepted by IBUs in the form of fixed deposits, can also be adjusted prematurely in case of default, again subject to the RBI circular DBR.IBD.BC.14570/23.13.004/2014-15 dated April 1, 2015.

Yes, financial institutions in IFSC (being persons resident outside India) are eligible to open and maintain a Special Non-Resident Rupee Account (SNRR) with a bank outside the IFSC, in accordance with the FEM (Deposits) Regulations, 2016 dated April 1, 2016. These SNRR accounts may be used to meet administrative expenses in INR outside the IFSC.

A bank account in an IFSC is considered as an account outside India. IBUs (IFSC Banking Units) can open foreign currency current accounts for: Units operating in IFSCs Non-resident institutional investors for trading and investment Foreign Portfolio Investors (FPIs), investing under FEMA 20(R) (FEMA Transfer or Issue of Security by a Person Resident Outside India Regulations, 2017), and holding a foreign currency account in India, can transfer funds from that account to any bank account in IFSC. Additionally, trading/clearing members or other entities in IFSC can remit funds from their IFSC bank accounts to bank accounts of foreign investors, whether those are outside or within India. Note: Individuals are not allowed to open accounts in IFSC. If they are permitted to transact, they must do so via fund transfers from their bank account outside IFSC to the beneficiary’s account.

Yes, margins accepted in the form of fixed deposits by clearing or trading members from their clients can be liquidated prematurely in the event of default, subject to adherence to the guidelines of the same RBI circular dated April 1, 2015.

For Indian banks: The parent Indian bank must provide a minimum capital of USD 20 million (or equivalent in any freely convertible foreign currency) to its IBU. This capital must be maintained at all times by the IBU. However, the overall regulatory capital, including the capital required for the exposures taken by the IBU, must be maintained at the parent bank level on an ongoing basis. For foreign banks: Similarly, a foreign bank must also provide a minimum capital of USD 20 million (or equivalent in any foreign currency) to its IBU, which must be maintained at all times. The regulatory capital for the IBU’s exposures must be maintained at the parent bank level in accordance with the home country’s regulations. Additionally, the IBU must submit a certificate from the parent bank every six months to the RBI’s International Banking Division confirming compliance. The parent foreign bank must also issue a Letter of Comfort, committing to provide capital or liquidity support to the IBU as and when required.

A financial institution or a branch of a financial institution in an IFSC is permitted to conduct business in foreign currency and deal with any persons, resident or non-resident, as determined by the respective Regulatory Authority, in accordance with the Foreign Exchange Management (International Financial Services Centre) Regulations, 2015 dated March 2, 2015

Yes, even if a bank is eligible, it must obtain prior permission from the Reserve Bank of India (RBI) to open an IBU. This is required under Section 23(1)(a) of the Banking Regulation Act, 1949, which governs the opening of branches and offices by banks.

IBUs can open foreign currency current accounts for: Units operating within the IFSC (International Financial Services Centre), and Non-resident institutional investors for the purposes of trading and investment activities.

Once the Reserve Bank receives and confirms the payment, a certificate of compliance is issued to the applicant. This certificate confirms that the compounding order has been fully complied with.

A compounding application may be submitted: Suo moto (voluntarily), once the person becomes aware of the contravention After receiving a Memorandum of Contraventions (MoC) from RBI Upon being informed by: RBI Statutory authorities Auditors Any other credible source Early voluntary disclosure is encouraged as it minimizes regulatory and legal burden.

Contravention refers to any violation or breach of the provisions of the Foreign Exchange Management Act (FEMA), 1999, or the rules, regulations, directions, orders, circulars, or notifications issued under it. Compounding is a voluntary process where a person or entity: Admits to the contravention Pleads guilty Applies for redressal by paying a monetary penalty The Reserve Bank of India (RBI) is empowered to compound contraventions under Section 13 of FEMA, 1999, except violations under Section 3(a), which deals with dealings in foreign exchange outside authorized channels. Cases covered under Rule 9 of the Foreign Exchange (Compounding Proceedings) Rules, 2024, are not eligible for compounding by RBI.

Yes. The applicant can authorise another person to attend on their behalf, provided: A proper written authority letter is submitted The authorised person is well-versed with the nature of the contravention 🔹 However, RBI encourages the applicant to personally appear, as compounding is only applicable to admitted contraventions, and typically does not require legal representation.

If the compounding amount is not paid within the stipulated 15 days, it is treated as if no compounding application was ever made. In such cases: The contravention will be handled under regular FEMA enforcement procedures, and The matter will be referred to the Directorate of Enforcement (DoE) for further action.

The compounding amount mentioned in the Compounding Order must be paid within 15 days from the date of the order. Payment can be made via: Demand Draft in favour of “Reserve Bank of India” NEFT, RTGS, or other permitted electronic/online payment modes The compounding order will contain complete instructions, including account details or how the draft should be drawn.

Any individual or company that has committed a contravention under FEMA (except under Section 3(a)) can apply for compounding. Contraventions under Section 3(a) must be referred to the Directorate of Enforcement (DoE). This includes violations of: FEMA provisions RBI directions, circulars, or authorizations issued under FEMA Any rule, regulation, or notification under FEMA

The application should be submitted to the Reserve Bank of India (RBI) as per the location-specific jurisdiction outlined in: Paragraphs 2.1 to 2.4 of the Directions – Compounding of Contraventions under FEMA, 1999 This could include the concerned Regional Office, the Central Office Cell (New Delhi), or Central Office (Mumbai), depending on the case.

No. Since compounding is a voluntary process based on admission of contravention, there is no provision under the Foreign Exchange (Compounding Proceedings) Rules, 2024 for: Filing an appeal against the compounding order Requesting reduction in the amount imposed, or Seeking extension of time for payment

You can refer to the full document: “Directions – Compounding of Contraventions under FEMA, 1999” Available on the official Reserve Bank of India website.

No. All necessary approvals and compliances must be completed before applying for compounding. As per Paragraph 4.2 of the Compounding Directions: Compounding will only be considered after administrative actions are completed Copies of approvals, filings, and any other supporting documents must be enclosed with the application

The RBI Compounding Authority will issue a formal compounding order, which includes: The details of the contravention The provisions of FEMA violated The compounding amount to be paid Once the applicant pays the specified amount, the compounding process is considered complete

Yes. A non-refundable application fee of ₹10,000 + 18% GST (currently applicable) must be paid. Modes of payment: Demand Draft in favour of "Reserve Bank of India", payable at the concerned Regional Office/CO Cell/Central Office Or via NEFT or other approved online payment methods If paying electronically: Notify the concerned RBI office via email within 2 hours of payment Use the email template provided in Annexure I (Para B) of the Directions If the application is returned for any reason, the fee will not be refunded, but need not be paid again if the same application is resubmitted.

No, it is optional. The applicant can choose: To attend the personal hearing (physically or via video conference), or To opt out in writing 🔹 If the applicant chooses not to appear, the case will be decided based on the documents submitted. Note: Attending or skipping the hearing does not affect the compounding amount, which is calculated strictly as per Para 5.4 of the Guidance Note on the Computation Matrix under the Compounding Directions.

The RBI aims to complete the entire compounding process within 180 days from the date of receipt of a complete application.

Are there any relaxations where details are provided for certain account holders?Entities operating as IBUs must follow the RBI Master Direction on Know Your Customer (KYC) dated February 25, 2016, including any subsequent amendments. These norms are mandatory and ensure proper identity verification and due diligence of account holders. Relaxations, if any, are specified within the Master Directions based on account type or customer category.

Along with the application in the prescribed format, the applicant must submit: Relevant Annexures depending on the nature of contravention: Foreign Direct Investment (FDI) External Commercial Borrowings (ECB) Overseas Direct Investment (ODI) Branch Office/Liaison Office (BO/LO) Annexures are available in the Directions – Compounding of Contraventions under FEMA, 1999. Additional documents required: A self-declaration stating that the applicant is not under investigation by the Directorate of Enforcement (DoE) Cancelled cheque copy Memorandum of Association (MoA) of the entity (if applicable) Contact details of the applicant or authorised representative (name, mobile number, and email ID)

Sensitive contraventions refer to violations that involve: Money laundering Terror financing Threats to national security, sovereignty, or integrity Such cases will not be compounded by the RBI.

To apply for compounding: Submit the compounding application form, either: Physically, or Through the PRAVAAH Portal of RBI The application must include: Annexure I – Application details & fee payment info Annexure II – Details of the contravention Annexure III – Supporting documents Refer to the “Directions – Compounding of contraventions under FEMA, 1999” for official formats and submission process.

The calculation of compounding amount is guided by the structure provided in Paragraph 5.4 of the Directions – Compounding of Contraventions under FEMA, 1999. 🔹 However, this guidance is not absolute—it is intended to bring uniformity across different RBI offices. The actual amount may vary depending on the specific circumstances of each case. The RBI takes into consideration several factors outlined in Paragraph 5.3 of the Directions—such as nature, gravity, and frequency of the contravention.

The following payments can be made from an EEFC account: - Foreign exchange payments outside India for: Permissible current account transactions under FEMA (Current Account Transactions) Rules, 2000 Permissible capital account transactions under FEMA (Capital Account Transactions) Regulations, 2000 - Payments in foreign exchange for purchase of goods from: 100% Export Oriented Units Units in EPZs, STPs, or EHTPs - Customs duty payments as allowed under the Foreign Trade Policy in force. - Trade-related loans or advances extended by the EEFC account holder (exporter) to importers abroad, in compliance with FEMA (Borrowing and Lending in Foreign Exchange) Regulations, 2000. - Payments in foreign exchange to residents in India for goods or services, including: Airfare Hotel expenses

Yes. If reimbursement has been made in foreign exchange, then foreign exchange earnings received through international credit cards are considered as remittance through normal banking channels and can be credited to the EEFC account.

No, units located in Special Economic Zones (SEZs) are not permitted to open EEFC accounts. However: SEZ units can open a Foreign Currency Account with an Authorised Dealer in India, Subject to the conditions specified under Regulation 4(D) of the FEMA (Foreign Currency Accounts by a Person Resident in India) Regulations, dated January 21, 2016.

Yes. EEFC account balances can be hedged (sold forward) to protect against exchange rate risk. Key conditions: The hedged amount must be earmarked for delivery on maturity. Forward contracts can be rolled over if necessary.

Yes. Resident individuals may include their resident relative(s) as joint holders of an EEFC account on a ‘former or survivor’ basis. The term “relative” is defined under Section 2(77) of the Companies Act, 2013.

No, Rupee withdrawal from an EEFC account is allowed without restriction. However: Once the foreign currency is converted into Rupees and withdrawn, it cannot be reconverted into foreign currency for re-crediting into the EEFC account.

The following foreign exchange earnings can be credited to an EEFC account: Inward remittances through normal banking channels, except: Foreign currency loans Foreign investments Funds received to meet specific obligations Payments in foreign exchange received by: 100% Export Oriented Units (EOUs) Units in Export Processing Zones (EPZs), Software Technology Parks (STPs), or Electronic Hardware Technology Parks (EHTPs) for supply of goods to similar units or Domestic Tariff Area (DTA) units. Payments in foreign exchange received by a DTA unit for supplying goods to a Special Economic Zone (SEZ) unit. Payments from an authorised dealer’s account maintained for counter trade purposes (adjusting import and export values as per RBI guidelines). Advance remittances received against export of goods or services. Payments for exports made from repayment of State Credit (in US Dollars) held with Bank for Foreign Economic Affairs, Moscow, in an authorised dealer’s account in India. Professional earnings received in foreign currency by individuals for: Consultancy Lectures Honoraria Directors’ fees and similar personal services. Re-credit of unutilised foreign currency earlier withdrawn from the EEFC account. Repayments from overseas importers to whom trade-related loans or advances were given by the exporter holding the EEFC account (subject to regulatory compliance). Disinvestment proceeds received by residents upon conversion of their shares into ADRs/GDRs under the Sponsored ADR/GDR Scheme, approved by the Foreign Investment Promotion Board.

You can credit 100% of your foreign exchange earnings into the EEFC account. However, there is one condition: The total amount credited during a calendar month must be converted into Indian Rupees on or before the last day of the next calendar month, Unless it has already been used for permitted purposes or covered under forward commitments.

An Exchange Earners’ Foreign Currency (EEFC) Account is a type of account held in foreign currency with an Authorised Dealer Category-I bank (a bank approved to deal in foreign exchange). This facility is provided to individuals and businesses who earn foreign exchange (such as exporters). The key benefit is: They can credit 100% of their foreign currency earnings into the EEFC account. This avoids repeated currency conversions between foreign exchange and Indian Rupees, thereby saving on transaction costs.

All resident individuals and entities (such as companies, firms, etc.) in India who earn foreign exchange are allowed to open an EEFC account.

Yes, cheque facility is available for operating an EEFC account.

EEFC accounts can be held only as current accounts. No interest is paid on the balance maintained in an EEFC account.

The SL Circular provides guidelines on what types of transactions are allowed for a ship lessor in an IFSC. Here’s a clear breakdown of different possible situations and whether they’re permitted: (a) If a ship or ocean vessel owned or leased by an Indian entity is already being used for Indian clients, and then transferred or leased by an IFSC-based entity just to serve Indian clients in the same financial year — this is not permitted. (b) If an Indian company wants to expand its business globally or bid for international contracts, and plans to set up a ship leasing business in an IFSC — this is permitted. (c) If a ship lessor registered with IFSCA acquires a ship (either by buying it or leasing it) from a person outside India or from the foreign market, solely to serve Indian clients — this is permitted. (d) If an applicant or an IFSCA-registered ship lessor buys a newly built ship (from any shipyard — whether in India or abroad) and uses it to serve Indian or international clients — this is permitted.

This means that if a ship lessor in an IFSC acquires a ship or ocean vessel, either by: Leasing it in Chartering it in Buying it Or getting leasehold rights from an Indian entity (except for newly built ships purchased from Indian shipyards), then that ship cannot be used only for Indian clients in a single financial year. However, if the same ship serves both foreign clients and Indian clients, then it is allowed. In simple terms: A ship acquired from an Indian company cannot exclusively serve Indian clients for a whole financial year, but if it serves both Indian and foreign clients, it’s permitted.

No. A ship lessor in India cannot transfer its existing business or ongoing contracts with Indian clients to GIFT IFSC by setting up a ship leasing unit there. However, once the existing contracts are completed or end, the ship lessor can take up new contracts through an IFSCA-registered ship lessor in GIFT IFSC In short: Existing contracts can’t be moved, but new eligible contracts can be done through IFSC after the old ones conclude.

At present, e-wallets issued by a PSP can hold the following currencies: USD (US Dollar) EUR (Euro) JPY (Japanese Yen) GBP (British Pound Sterling) CAD (Canadian Dollar) AUD (Australian Dollar) CHF (Swiss Franc) HKD (Hong Kong Dollar) SGD (Singapore Dollar) AED (UAE Dirham) RUB (Russian Rouble) These are collectively known as “specified currencies” under the regulations.

The main purpose of issuing the Payment Services Regulations is to: Set up a clear framework for how entities can apply to become Payment Service Providers (PSPs) in the IFSC (International Financial Services Centre). Allow these PSPs to provide various payment services to customers within and outside the IFSC, but only if they follow the rules and conditions mentioned in the regulations. In short: The regulations are a rulebook that defines who can offer payment services in the IFSC and how they must operate safely and efficiently.

A security deposit, if mandated and collected, is not meant to serve as an insurance fund or repayment pool for: Customers’ funds held with the PSP Suppliers of goods and services to the PSP The PS Regulations already require PSPs to safeguard customer funds in escrow accounts — so ideally, customers' dues should never fall below what’s held in escrow. The security deposit acts as a regulatory tool for IFSCA, and though it can be used to settle dues towards customers or suppliers in specific cases like PSP failure, it: Is not a legal entitlement or guaranteed right for customers or suppliers Should not be relied upon as a substitute for the PSP’s financial obligations or risk management practices Suppliers, too, are expected to manage their own credit exposure to PSPs independently.

This restriction follows IFSCA’s clear policy of not permitting cash transactions in IFSC. The regulations are designed to encourage the use of electronic and digital payment methods. Allowing cash withdrawals from e-wallet balances would go against this objective. Additionally, this aligns with global regulatory practices, where most international financial centres also prohibit cash transactions through e-wallets for reasons of transparency, traceability, and risk control.

A Nodal Bank is the primary bank (an IBU/IBC in IFSC) through which a PSP must handle: Escrow accounts for safeguarding customer funds Security deposits, if required and other key regulatory transactions. IFSCA needs to know and supervise this Nodal Bank relationship for regulatory oversight. However — PSPs may, for operational reasons, open additional accounts with other banks in IFSC. For example: To manage situations where the Nodal Bank’s systems are temporarily unavailable Or to support certain payment services like escrow services requiring multiple accounts But in all such cases, the PSP must justify the need for these additional accounts based on its business activities and transaction volumes.

The merchant acquisition service in the regulations specifically refers to: Payment Aggregation services Meaning, the PSP collects payments on behalf of merchants, offering customers multiple payment options like cards, UPI, net banking, wallets etc. The service also involves settling the collected funds to the merchant's account after receiving them from the customer’s bank or other payment sources. Important: Payment Gateway services (which only enable the technical processing of payment requests) are excluded from the scope of merchant acquisition services, as they are treated as technical services under Clause 2(h) of Part B, Schedule I of the regulations.

Not exactly. The Authority can ask a PSP to maintain a security deposit either: At the time of issuing the authorisation or At any point during the PSP’s operations. This security deposit is not meant as a customer fund guarantee or insurance. Purpose: If a PSP’s authorisation is revoked or surrendered, the Authority can use the security deposit: To settle any outstanding claims or dues from customers (payment service users) To cover any other regulatory liabilities Important: This deposit may help recover part of the customers' funds, but it does not guarantee full protection or compensation against losses.

Let’s break this down step-by-step: 1️ Application Stage Any entity (like a parent company or its group company) that wishes to get authorized as a Payment Service Provider (PSP) in IFSC must apply to the IFSCA (the Authority). Important: At this stage, the actual company (the PSP itself) does not need to be formed yet. The application can be filed in the name of the parent company or a group company intending to set up the PSP later. The application must follow the format and manner prescribed in the relevant circular (dated 6th February 2024), but not all fields in the form may be relevant for PSPs. Applicants can skip sections that don’t apply. 2️ In-Principle Approval Stage The Authority will review and scrutinize the application. It may ask for additional information or clarifications. If satisfied with the eligibility and proposed business plan, the Authority grants an in-principle approval. This approval will come with certain conditions to be fulfilled before the final authorization is granted. 3️ Formation of the Company Only after receiving the In-Principle Approval, the applicant must incorporate a new company with its registered office in IFSC. The newly formed company must be funded sufficiently to meet the minimum net worth requirements specified in the regulations. 4️ Grant of Final Authorisation Once the new company is incorporated, capitalized, and all conditions of the In-Principle Approval are met: The Authority will conduct a final review. Any deficiencies must be corrected within the given deadline, failing which the application can be rejected. The applicant can also withdraw the application at any time before final approval. After satisfying all requirements, the Authority will issue the Certificate of Authorization to the company. The authorized company (now officially a PSP) must commence operations within the timeframe mentioned in the regulations. Important Notes: If a financial institution already operating in IFSC as a company under other regulations wants to act as a PSP, it can also apply, provided its existing regulatory framework permits. The Authority considers the formal application as the final step of the PSP setup process. Applicants are encouraged to engage with the Authority beforehand to discuss their business model and operational plan.

No, not every activity connected to payments is regulated under the PS Regulations. Which activities are covered? Only those services are considered payment services if they involve: Providing a transaction account (like a wallet or bank account) from which a payment can be made, or Providing a way to issue a payment order (like an app, POS machine, or online banking), or Providing a service/channel that connects the payer and the payee (like a mobile app or payment gateway). Based on this, five specific services have been allowed under the PS Regulations. Why are some services excluded? Some services are not considered payment services because: They’re just internal transactions between related companies (like between a parent company and its subsidiary) and don't involve public payment facilitation. Some activities, like technical support services (e.g., providing and maintaining POS terminals or back-end software), are only enabling services and don’t directly handle money movement. Banks and card networks (like Visa, Mastercard, and RuPay) already offer payment services naturally as part of their core business, and they’re already regulated under their respective frameworks. So, they don’t need a separate authorization under these PS Regulations. In short: Only those services that directly manage payments between payers and payees, accounts, or payment orders are covered. Related-party transactions, technical support, and activities by already-licensed entities like banks and card networks are excluded because they’re either internal, non-financial, or already regulated.

As per Regulation 23(1) read with Schedule VI, PSPs must safeguard the total applicable funds they hold at any given time. If a single transaction involves multiple payment services (like both cross-border money transfer and merchant acquisition service together), then: The PSP must safeguard the entire sum of funds held for that transaction. These safeguarding measures remain in effect until the transaction is successfully completed and the funds leave the PSP’s possession. The safeguarding requirement is holistic , it covers all customer funds received by the PSP for any payment service until settlement.

Here’s a simple breakdown: Authorization: Any entity that wants to offer payment services in IFSC must apply for authorization as a Payment Service Provider (PSP). Once approved, the entity becomes a Regular PSP (RPSP). This authorization is perpetual; it stays valid until either the authority cancels it, or the PSP itself gives it up. Designation: If an authorized PSP’s business grows beyond certain specified limits (mentioned in Part C of Schedule I of the regulations), it is automatically designated by the authority as a Significant PSP (SPSP). This means the PSP has become big enough to be treated differently for regulatory oversight. You cannot directly apply to become an SPSP; it’s a status given by the authority when your business reaches the required size. In summary: Apply for authorization as a PSP. Once authorized, you’re called an RPSP. If your business grows to meet the SPSP threshold, the authority will designate you as an SPSP. No separate application is needed for the SPSP status; it’s granted automatically when you meet the criteria.

IFSCA may require a PSP to maintain a security deposit if, in its assessment, the PSP’s: Business model Operational structure warrants such a precaution. This requirement can be imposed: Before the PSP starts its operations or At any time later during the PSP’s business operations How is the amount decided? The amount (quantum) of security deposit is primarily linked to: The current business volume of the PSP Adjustments based on the expected future growth of the business So, higher the scale and complexity of operations, larger the likely deposit requirement.

IFSCA follows a principle-based regulatory approach rather than imposing rigid, one-size-fits-all rules. Since: Cash withdrawals from e-wallets are already prohibited, the usual concerns about people withdrawing large sums of cash from e-wallets don’t apply here. Instead, IFSCA expects each PSP to: Have a strong risk management system that can decide whether a cap is needed for specific users or situations. Set these caps based on factors like: The user’s transaction history Risk assessment Operational needs PSPs are also encouraged to give their users the option to set personal, discretionary limits on their own e-wallet balances. So, while IFSCA doesn’t impose a blanket cap, it expects PSPs to manage this issue responsibly and dynamically.

Cross-border money transfer services include: Accepting money from a person in IFSC to transmit (or arrange to transmit) that money to a person outside IFSC. Receiving money from a person outside IFSC to transmit to someone in IFSC. Receiving money from a person outside IFSC and remitting it to another person outside IFSC. Key Points: The service covers money transfers in any direction involving IFSC or even between two parties both outside IFSC. It also includes scenarios where the sender and recipient are the same person (for example, a person remitting money to their own account abroad). So, any cross-border money movement facilitated by a PSP falls within this category, regardless of who the sender and recipient are.

No. An e-wallet issued by a PSP cannot hold Indian Rupee (INR) in any form or manner — whether as balance, deposits, or stored value.

No. An e-wallet issued by a PSP cannot store or hold any cryptocurrencies (like Bitcoin, Ethereum, etc.) or stablecoins under any circumstances as per the current regulations.

As explained earlier, the application for PSP authorisation can be made by: A Parent company in India looking to set up a PSP as a subsidiary in IFSC or Any group company of the Parent company. The company set up in IFSC for holding the PSP licence will be treated as a ‘person resident outside India’ under FEMA (Foreign Exchange Management Act, 1999). Therefore, an Indian company (Parent) planning to set up a PSP in IFSC must carefully consider FEMA provisions, especially those relating to: Setting up subsidiaries outside India Remitting capital abroad Compliance and reporting obligations Foreign Companies: A parent company or group company based outside India can also apply for PSP authorisation in IFSC. In that case, both the applicant and the PSP entity established in IFSC would be considered persons resident outside India.

Let’s break this down simply: Payment Services - These are the services you use to make or receive payments. Example: A mobile app, a POS machine, your online bank account, etc. PSPs (Payment Service Providers) offer payment services to you , like apps, e-wallets, or banks providing interfaces for payments. Payment Systems - This is the infrastructure or network that actually moves the money from one account to another. Example: RTGS, NEFT, UPI , the systems that process and settle funds between banks. PSOs (Payment System Operators) manage the payment systems (the backend processes of transferring money). Think of it like this: PSPs are the front-end shops where customers place orders. PSOs are the back-end kitchens that actually cook and deliver the orders. Diagram context: PSPs = Front-End (apps, POS, banking platforms) PSOs = Back-End (money transfer networks)

A person is considered to be providing payment services in or from IFSC when: They have a place of business in IFSC and They provide one or more of the payment services listed in Part A of Schedule I of the PS Regulations from that place (either as a standalone activity or along with other services). Authorisation as a PSP is mandatory before offering these services in or from IFSC.

A PSP’s authorisation is granted on the condition that it only provides the payment services permitted under the PS Regulations. Reason: The core risks faced by PSPs relate to operational risks (such as system failures, fraud, data breaches, etc.) Lending or advancing money introduces an entirely different type of risk — credit risk, which: Requires a different regulatory framework Needs higher capital reserves Involves specialised risk management systems IFSCA believes it’s in the interest of systemic stability that PSPs stay focused on payment services and avoid venturing into credit activities, which are better handled by banks and NBFCs.

No. If a third party (other than an authorised agent of the PSP) adds money to an e-wallet, it is not treated as an account issuance service activity under the PS Regulations. Only the PSP itself or its authorised agents are regarded as carrying out account issuance when managing wallets.

Yes. Under the IFSCA (AML, CFT and KYC) Guidelines, 2022, a ‘regulated entity’ includes any unit or entity that has received a license, authorization, or registration from the IFSCA. Since a PSP operates under authorization from the Authority, it qualifies as a regulated entity and is required to: Follow the prescribed AML/CFT and KYC obligations Set up appropriate monitoring, reporting, and compliance mechanisms

IFSCA will assess such breaches based on: The cause of the breach Whether the PSP had anticipated such risks And whether the PSP took reasonable and proactive steps to manage or prevent the situation In other words — if the breach happened due to unavoidable currency fluctuations, but the PSP had sound controls and reasonable safeguards in place, IFSCA will consider these factors while taking a view on the matter.

The Account Issuance Service means providing a payment account to a person either within IFSC or outside IFSC. Types of payment accounts: Physical forms , like charge cards (prepaid cards or similar instruments) Virtual forms , like e-wallets or prepaid digital accounts Important: To be classified as a payment account under the regulations: The account must allow the holder to initiate payment orders or carry out payment transactions. Note for PSPs: When deciding if an account falls under this category, check if: The account is issued by you. It enables payments or transfers. It meets the formal definition of ‘payment account’ under the regulations.

Many PSPs partner with third-party service providers (TPSPs) for different aspects of their payment services — like tech support, payment gateway management, etc. The regulations require PSPs to have proper systems to: Select and onboard TPSPs carefully Monitor their performance and financial stability Maintain business continuity plans in case a TPSP shuts down or fails Rationale: These requirements ensure that PSPs: Take responsibility for the risks introduced by their service providers Safeguard the quality and safety of payment services for users IFSCA also considers the extent of third-party reliance when reviewing applications for authorisation as a PSP under Regulation 8.

A BATF Service Provider must have at least 60 square feet of office space per employee in its IFSC office.

Any company or entity that wants to provide Book-keeping, Accounting, Taxation, or Financial Crime Compliance (BATF) services in an IFSC must first get a Certificate of Registration from the IFSCA before starting operations.

Yes. According to Part A of the First Schedule of the BATF Regulations, at the end of each financial year, no more than 20% of the total workforce at a BATF Service Provider in IFSC can be employees transferred from its group entities in India.

As per the BATF Regulations, IFSC units that provide BATF services along with other ancillary services must keep their BATF operations completely separate (ring-fenced). This means: 1) Revenue, contracts, and expenses for BATF services should be shown separately from other services. 2) The IFSC unit must also maintain separate financial statements, reports, and records for each service as required under the applicable IFSCA Regulations, Frameworks, Circulars, Guidelines, and the conditions mentioned in their Registration/Authorization letters.

No. Under the BATF Regulations, outsourcing or sub-contracting services to any entity located in India, including group entities, is not allowed.

Yes. According to Regulations 8 & 9 of the BATF Regulations (along with the First Schedule), the applicant must make sure that the new IFSC business is not created by: Splitting an existing business in India, Restructuring an existing Indian business, or Reorganizing an existing Indian business. Also, a BATF Service Provider cannot transfer or take over existing contracts or work arrangements from its group companies in India.

Yes. A company set up in an IFSC can apply for and hold both: Registration under BATF Regulations for offering book-keeping, Accounting, Taxation, and Financial Crime Compliance (BATF) services, and Authorization under the Ancillary Services Framework (dated 10th February 2021) for offering other ancillary services. Both permissions are separate and need to be obtained and maintained under their respective rules.

Yes. During the transition period, an Ancillary Service Provider can continue offering other services (apart from BATF services) under its existing contracts or agreements made before the BATF Regulations came into force, as long as those services are allowed under the Ancillary Services Framework.

A company in an IFSC, if it holds permissions under different regulations or frameworks, must: Keep separate records and revenue accounts for each set of services as required by their respective rules. During the transition period, it must also follow the rules mentioned in the Second Schedule of the BATF Regulations, especially regarding existing contracts, employees, and resources being used.

No. If a service provider is offering Fund Accounting Services under ‘Administration Services’ as per the IFSCA Ancillary Services Framework, it does not need a separate registration under BATF Regulations and can continue operating under the Ancillary Services Framework.

Service providers must follow the requirements listed in Regulation 14 of the BATF Regulations. In addition, they must comply with other applicable rules for IFSC units, including the IFSCA (AML, CTF and KYC) Guidelines, 2022, which deal with anti-money laundering, countering terrorism financing, and customer verification processes.

Yes. The same Principal Officer and Compliance Officer can continue holding these positions for both the Ancillary Services unit and the BATF Service Provider during the 3-year transition period or until the full migration is completed, whichever is earlier.

The fee structure for registering and maintaining a BATF Service Provider license in IFSC is as follows: Application Fee: USD 1,000 (per activity) Registration Fee: USD 5,000 (per activity) Annual Fee: USD 5,000 per activity (for up to 500 employees) USD 7,500 per activity (for 500–1000 employees) USD 10,000 per activity (for more than 1000 employees) Note: All fees are non-refundable.

Ancillary Service Providers who wish to continue offering BATF services must: 1) Apply for registration under the new BATF Regulations within three years from the date the regulations are notified, 2) Ring-fence their BATF operations from other services, and 3) Follow the required conditions and pay the applicable one-time Registration Fee and Annual Fee (both non-refundable).

A BATF Service Provider can only provide services to non-residents. Additionally, they must ensure that their clients are not from countries or jurisdictions listed as “High Risk – subject to call for action” by the Financial Action Task Force (FATF) in its public statements.

A BATF Service Provider can conduct its permitted activities in any of the following foreign currencies: US Dollar (USD) Euro (EUR) Japanese Yen (JPY) UK Pound Sterling (GBP) Canadian Dollar (CAD) Australian Dollar (AUD) Swiss Franc (CHF) Hong Kong Dollar (HKD) Singapore Dollar (SGD) UAE Dirham (AED) Russian Rouble (RUB) Swedish Krone (SEK) Norwegian Krone (NOK) New Zealand Dollar (NZD) Danish Krone (DKK) Additionally: BATF Service Providers are allowed to maintain an INR (Indian Rupee) account but this is strictly for administrative and statutory expenses. They may also maintain an INR account for any other uses, but only if permitted under the applicable laws.

The process and guidelines for this transition are given in Regulation 4 and the Second Schedule of the BATF Regulations. Service providers must follow these rules to smoothly migrate their operations under the new BATF framework.

If you have any questions or need help interpreting the regulations, you can contact the Division of Ancillary Services, GIC and BATF at IFSCA.

Fees should be transferred to IFSCA in US Dollars (USD) using the following bank details: Account Name: International Financial Services Centres Authority Account Number: 970105000174 Type of Account: USD Current Account Bank Name: ICICI Bank Limited SWIFT Code: ICICINAAXXX NOSTRO Account Details: Correspondent Bank: JP Morgan Chase Bank NA, New York, USA SWIFT Code: CHASUS33XXX Account Number: 833999532 (b) Can entities in India (outside GIFT-IFSC) pay registration fees in Indian Rupees (INR)? Answer: Yes. Entities located in India (except those in GIFT-IFSC) have the option to pay the Application Fee and Registration Fee in Indian Rupees (INR) using the following bank account details: Account Name: IFSCA FUND 2 Account Number: 39907189884 Bank Name: State Bank of India Type of Account: INR Current Account IFSC Code: SBIN0060228 Important: When paying in INR, the applicable exchange rate will be the latest RBI reference rate available on the FBIL website, usually as of 7 days before the payment date. For complete details on fee payment, entities should refer to the IFSCA Fee Circular dated 17th May, 2023, and any amendments made to it over time.

After the full transition to a BATF Service Provider, resource-sharing agreements between two IFSC units are not allowed because of the requirement to keep operations separate (ring-fencing). However, during the transition period, this restriction doesn’t apply for contracts, manpower, and assets that were already in place before the BATF Regulations were notified.

Yes. As per standard accounting rules, an IFSC unit must keep its revenue from BATF services and other ancillary services separate, even for contracts that were signed before the BATF Regulations came into effect. This separation is also needed for reporting to IFSCA.

Any company or LLP operating in GIFT-IFSC can offer BATF services after getting registered with the Authority. This applies to both: 1) existing IFSC units (after obtaining BATF registration), and 2) newly set-up units in IFSC for BATF services.

The qualifications and eligibility requirements for Key Managerial Personnel are specified in Regulation 11(3) of the IFSCA (BATF) Regulations. You can refer to this regulation for the detailed criteria.

The complete process for registration is explained in the IFSCA Circular dated June 28, 2024, titled: "Form and Manner for seeking registration and other requirements under International Financial Services Centres Authority (Book-keeping, Accounting, Taxation and Financial Crime Compliance Services) Regulations, 2024." You can refer to this Circular for detailed step-by-step instructions.

No. As per the Government of India Notification dated 18th January 2024 and Regulation 19(1) of the BATF Regulations, companies registered under BATF can only provide their services to non-residents (including other IFSC units). They cannot provide tax advice or related services to Indian businesses directly.

No - there are no ongoing exceptions. However, when the BATF Regulations were first introduced, existing Ancillary Service Providers in GIFT-IFSC who were already offering book-keeping, accounting, or taxation services before the notification had to submit their willingness to continue under the new BATF Regulations within 60 days of its commencement. Those who did were issued a Letter of Continuation by IFSCA, allowing them to operate for up to 3 years to complete their transition and obtain proper registration under BATF Regulations.