IFSCA approved Draft Banking Regulations at IFSC
International Financial Services Centres Authority (IFSCA) on November 11, 2020 conducted a meeting in New Delhi. The IFSC Authority has approved the International Financial Services Centres Authority (Banking) Regulations, 2020 during the meeting.
The draft banking regulations which has been approved at the meeting open ways to make rules for various aspects of banking operations. These rules would be permissible at the IFSC. These banking regulations would help in reaching its desired potential.
Features of Banking Regulations
The banking regulations have understated features:
- It lays down the obligations to set up IFSC Banking Units (IBUs).
- The regulations further permit the persons residing outside India to open foreign currency accounts in any freely convertible currency. The person should have the net worth of not less than USD 1 Million in order to open currency accounts at IFSC Banking Units (IBUs).
- It also permit the persons residing in India having net worth of rupee USD 1 Million to open foreign currency accounts in any freely convertible currency at IBUs. This would undertake any permissible current account or capital account transaction under RBI’s Liberalized Remittance Scheme (LRS).
- It further permit the authority to determine the business that an IBU is permitted to conduct in INR with persons residing in India and persons residing outside India. It is subjected to the settlement of the financial transaction related to business in freely convertible foreign currency.
- The regulations also lay down the permissible activities of IBUs including the credit insurance, credit enhancement, engage in factoring, forfaiting of export receivables and purchase of portfolios.
International Financial Services Centres Authority (IFSCA)
This body has been launched by the government of India to modulate all the financial services in the International Financial Services Centres (IFSCs). The IFSCA modulates the financial products like deposits, financial services, securities and financial institutions that are approved by regulators like RBI and SEBI. The authority has been headquartered in Gandhinagar, Gujarat.