Understanding IFSCA Internet Banking Compliance for IBUs in GIFT City

The International Financial Services Centres Authority issued a detailed circular on December 29, 2025, regarding internet banking services offered by International Banking Units. This circular brings clarity and stronger compliance standards for IBUs operating in GIFT City, India.

For institutions and businesses seeking guidance from a financial planner in India or investment advisory services in India, understanding this regulatory update is important for compliant operations and long-term planning.

Why the IFSCA Circular Matters for Financial Institutions

IFSCA regulates banking and financial services in GIFT City to ensure transparency, safety, and global best practices. The revised circular focuses on three types of internet banking services

• Information service

• Interactive information exchange service

• Transactional service

Each service category now has specific compliance requirements. These requirements impact how IBUs design digital banking platforms, manage customer consent, and offer liability products.

For firms offering investment advisory services in India, this update directly influences risk management, client onboarding, and operational planning.

Applicability of Internet Banking Requirements for IBUs

The circular clearly defines which IBUs must comply

• IBUs that do not offer liability products are exempt from interactive and transactional service requirements

• New IBUs starting operations after the circular date must comply before offering liability products

• Existing IBUs must comply by June 30, 2026

• Failure to comply will restrict the onboarding of new liability product customers from July 1, 2026

This clarity allows businesses to plan compliance timelines with support from a top financial advisor in India's network.

Customer Consent as a Core Compliance Requirement

A key emphasis of the circular is explicit customer consent

• IBUs must obtain clear consent for internet banking registration

• Existing customers must provide consent again where required

• All consent must be recorded and documented

This strengthens consumer protection and aligns with international digital banking norms. Financial planning and investment planner India professionals often highlight this requirement as essential for trust building.

Information Service Requirements Explained Simply

For information services, IBUs must

• Display all supported currencies clearly

• Provide transparency on currency conversion availability

• Communicate transaction cut-off timings

• Clarify value date policies

These measures ensure customers receive accurate information before making financial decisions. This transparency also supports better advisory outcomes for those seeking the best investment advisory in India.

Interactive Information Exchange Service Compliance

IBUs offering interactive services must provide a unified digital banking dashboard. This dashboard must allow customers to

• View real-time balances across accounts

• See live market currency conversion rates and spreads

• Download account statements in machine-readable formats

• Provide inward remittance disposal instructions

• Apply for premature deposit withdrawals

• Receive transaction alerts through SMS or email

These features improve customer experience while ensuring regulatory oversight. From an advisory perspective, this enables better data-driven decisions by financial planner India.

Transactional Internet Banking Service Standards

Transactional services require the highest compliance standards. The circular mandates

• Dual-layer authentication using OTP or hardware tokens

• Fund transfers within the same IBU

• Payments to third parties within or outside the IBU

• Fixed deposit creation through digital channels

• User access management for corporate customers

• Beneficiary whitelisting options

• Currency conversion initiation

• Scheduled and rule-based payouts

• Validation tools for account accuracy and regulatory compliance

These controls reduce operational risk and strengthen trust in digital banking systems. Businesses relying on investment advisory in India benefit from safer transaction frameworks.

Regulatory Powers Behind the Circular

The directions are issued under

• IFSCA Act 2019

• Banking Regulation Act 1949

This legal backing ensures that compliance is mandatory and enforceable. Institutions guided by top financial advisors in India can align governance structures accordingly.

How This Circular Impacts Investment Advisory and Financial Planning

The updated framework affects

• Digital banking architecture

• Client onboarding processes

• Risk management policies

• Compliance timelines

• Cross-border transaction planning

Professionals offering investment advisory services in India must consider these factors while advising clients operating in GIFT City or engaging with IBUs.

Role of Expert Financial Advisory Support in GIFT City

Understanding regulatory changes requires expertise across banking, compliance, investment planning, and digital finance. Organisations operating in GIFT City benefit from structured advisory support that combines regulatory awareness with strategic financial planning.

GIFT CFO supports businesses and institutions by aligning regulatory compliance with growth objectives. With experience in financial structuring, advisory, and planning, it helps organisations navigate evolving IFSCA regulations efficiently.

Conclusion

The IFSCA internet banking circular sets a clear compliance roadmap for IBUs operating in GIFT City. From customer consent to transactional safeguards, every requirement aims to strengthen transparency, security, and global alignment.

For businesses, investors, and institutions seeking clarity through investment planner India or the best investment advisory in India service,s understanding and implementing these requirements is essential. With the right advisory approach, organisations can achieve compliance while maintaining operational efficiency and customer trust.