Key AML Compliance Updates for GIFT IFSC Financial Institutions

The International Financial Services Centres Authority (IFSCA) has released an extensive set of Frequently Asked Questions (FAQs) to provide practical guidance on implementing the IFSCA (Anti Money Laundering, Counter Terrorist Financing and Know Your Customer) Guidelines, 2022. Rather than introducing new regulatory requirements, the FAQs clarify how regulated entities should interpret and apply existing AML, CFT and KYC obligations across various operational scenarios.

The guidance addresses several practical aspects of compliance, including governance responsibilities, customer onboarding, FIU reporting, digital verification methods and ongoing due diligence. These clarifications are expected to help regulated entities improve operational consistency while maintaining robust compliance standards.

Strengthening Governance and Compliance Responsibilities

One of the major areas covered by the FAQs relates to governance.

IFSCA clarifies that every regulated entity must appoint separate individuals as the Designated Director and the Principal Officer, ensuring clear segregation of responsibilities.

The FAQs also explain who can hold these positions, eligibility requirements and their responsibilities under the AML framework. Additionally, every regulated entity must maintain an AML/CFT/KYC policy approved by its governing body or an authorised committee. Existing AML policies may continue if they already incorporate the key principles of the IFSCA Guidelines.

Customer Due Diligence Becomes More Practical

Customer Due Diligence (CDD) remains one of the most important pillars of AML compliance.

The FAQs provide practical clarification on acceptable verification methods, including physical document verification, Video based Customer Identification Process (V-CIP), business facilitators and reliable public information sources. They also clarify when digitally notarised documents and e-apostilled documents may be accepted for customer verification, provided they comply with the applicable legal framework of the issuing jurisdiction.

These clarifications support more efficient onboarding while maintaining the integrity of customer verification processes.

Stronger Focus on Reporting Obligations

The FAQs reinforce the reporting responsibilities of regulated entities under the Prevention of Money Laundering framework.

All eligible regulated entities operating in GIFT IFSC are required to register on the FIU-IND FIN Gate 2.0 portal to fulfil reporting obligations. The guidance explains the registration process, reporting requirements and responsibilities relating to Suspicious Transaction Reports (STRs), cross-border wire transfers and other prescribed transactions. It also clarifies the role of the Principal Officer in ensuring timely reporting to FIU-IND.

Enhanced Clarity for Digital Onboarding

As financial institutions increasingly adopt digital onboarding, the FAQs provide operational guidance for implementing V-CIP, particularly for eligible Non Resident Indian (NRI) customers.

The document explains customer eligibility, debit freeze requirements where address verification is incomplete, verification of first credit transactions and cybersecurity expectations for V-CIP platforms. It also confirms that generic communication platforms cannot be used unless they satisfy the prescribed technical standards under the Guidelines.

Counter Terrorist Financing Remains a Priority

The FAQs also reiterate regulatory expectations regarding Counter Terrorist Financing (CTF).

Regulated entities must immediately report potential matches with designated individuals or entities, prevent prohibited financial transactions where required and comply with asset freezing procedures under applicable laws. These clarifications strengthen India's commitment to international AML and CTF standards while supporting financial system integrity.

What Financial Institutions Should Review

The FAQs provide regulated entities with an opportunity to evaluate their current compliance framework.

Key review areas include:

• AML/CFT/KYC governance structure

• Appointment of Designated Director and Principal Officer

• Customer onboarding procedures

• FIU-IND registration and reporting

• V-CIP implementation

• Customer Due Diligence processes

• Suspicious Transaction Reporting

• Internal AML policies and staff training

Proactive review of these areas will help organisations strengthen regulatory compliance while improving operational efficiency.

How Gift CFO Can Help

Gift CFO assists banks, financial institutions, fintech companies, fund managers, family offices and international businesses with GIFT IFSC advisory, AML/CFT compliance, regulatory implementation, governance support, tax advisory and cross-border business structuring. Our team helps organisations interpret regulatory developments and implement practical compliance solutions aligned with evolving IFSCA requirements

DISCLAIMER: This article is published for informational, educational, and analytical purposes only. It does not constitute legal advice, regulatory guidance, trade compliance advice, or a solicitation of any kind.

All information in this article is based on IFSCA Circular No. IFSCA-PMTS/10/2023-Precious Metals/2026/2 dated 15th June 2026, issued under Sections 12 and 13 of the International Financial Services Centres Authority Act, 2019, read with Regulation 78 of the IFSCA (Bullion Market) Regulations, 2025. This circular amends the original Circular dated 10th October 2025 on import of gold or silver by Qualified Jewellers and valid India-UAE CEPA TRQ holders through IIBX, as previously updated on 2nd January 2026.

References to DGFT Notifications 17/2026-27 (dated 16th May 2026) and 19/2026-27 (dated 2nd June 2026) are based on information contained within the IFSCA circular. Readers should independently verify the full text of these DGFT notifications for complete details.

A separate, updated Consolidated Circular incorporating these amendments is being issued by IFSCA. Readers should refer to the official, most current Consolidated Circular available at www.ifsca.gov.in under Legal Framework → Circulars for authoritative and up-to-date compliance requirements.

Eligibility for Qualified Jeweller notification, import authorisation requirements, and applicable policy conditions may vary based on entity type, SEZ status, ITC(HS) classification, and other factors specific to each applicant. Entities are strongly advised to consult qualified legal, customs, trade compliance, and tax professionals before undertaking any bullion import transaction through IIBX.

The publisher is not a law firm, customs broker, or IFSCA-regulated entity. Nothing in this article constitutes legal or regulatory advice.