International Financial Services Centres Authority (IFSCA) conducted a meeting on November 11 in New Delhi. The IFSC Authority approved the International Financial Services Centres Authority (Banking) Regulations, 2020 in the meeting.
The draft banking regulations approved at the meeting opens the way for making rules for the various aspects of banking operations that would be permissible at the IFSC. As banking plays an important role at IFSC, banking regulations will help it in reaching its desired potential.
Features of Banking Regulations
The banking regulations will include-
- To lay down the obligations for setting up IFSC Banking Units (IBUs).
- To Permit the persons residing outside India (with net worth not less than USD 1 Million) to open foreign currency accounts in any freely convertible currency at IFSC Banking Units (IBUs).
- To permit persons residing in India (with net worth not less than USD 1 Million) to open foreign currency accounts in any freely convertible currency at IBUs in order to undertake any permissible current account or capital account transaction or any combination thereof under RBI’s Liberalized Remittance Scheme (LRS).
- To lay down the activities of IBUs that are permissible including credit insurance and sale, credit enhancement, engage in factoring and forfaiting of export receivables, purchase of portfolios, and undertake equipment leasing.
- To permit the authority for determining business that an IBU may be permitted to conduct in INR with persons residing in India and persons residing outside India, subjected to settlement of the financial transaction related to such business in freely convertible foreign currency.
About IFSCA
International Financial Services Centres Authority is a body launched by the government of India to modulate all financial services in International Financial Services Centres (IFSCs). The authority modulates financial products like deposits, financial services, securities and financial institutions approved by regulators like RBI and SEBI. IFSCA is headquartered in Gandhinagar, Gujarat.