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Tags: Mobile edit Mobile web edit |
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| Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004 (“ODI Regulations”) restrict investment by an Indian resident into an overseas firm in the financial services sector. To enable, Indian residents to set-up and invest funds in GIFT City, RBI, vide its Circular dated May 12, 2021 has permitted sponsor contribution from a sponsor Indian party in an Alternative Investment Fund (AIF) established overseas, including IFSC. | | Foreign Exchange Management (Transfer or Issue of any Foreign Security) Regulations, 2004 (“ODI Regulations”) restrict investment by an Indian resident into an overseas firm in the financial services sector. To enable, Indian residents to set-up and invest funds in GIFT City, RBI, vide its Circular dated May 12, 2021 has permitted sponsor contribution from a sponsor Indian party in an Alternative Investment Fund (AIF) established overseas, including IFSC. |
| ===Opportunities for Banking Sector in IFSC:===<ref>{{Cite web |title=Gift City In Gujarat And Incentives To Financial Sector - Financial Services - India |url=https://www.mondaq.com/india/financial-services/1154182/gift-city-in-gujarat-and-incentives-to-financial-sector |access-date=2022-12-05 |website=www.mondaq.com}}</ref>
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| Indian banks and foreign banks can set up their business units in IFSC and can undertake following activities in IFSC:
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| '''1.Asset Business:'''
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| * External Commercial Borrowing (ECB) loans to Indian borrowers. Indian borrowers may prefer loans from IBU because of physical proximity and because of known documentation.
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| * Buyers credit facilities to Indian borrowers: Pursuant to RBI directions, Indian branches of banks are not allowed to provide buyers credit facilities to the customers. However, since IBU is an offshore branch, it can provide buyers credit facilities to Indian borrowers.
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| * Foreign currency Loans to foreign companies.
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| * Foreign currency loans to entities registered in IFSC.
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| * Export bill discounting facility to Indian businesses.
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| * Financing Aircraft and ship leases and acquisitions.
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| '''2.Liability Business:'''
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| * Open foreign currency current, savings accounts for Resident Individual and Non-Resident Individuals as per IFSCA Regulations.
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| * Foreign currency deposits from banks, corporates, or retail customers.
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| '''3.Exchange operations:'''
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| * Clearing and settlement activities for exchanges in IFSC.
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| * Professional clearing services.
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| * Custody services for securities (depository receipts) registered in IFSC.
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| === Opportunities for Banking Sector in IFSC: === | | === Opportunities for Banking Sector in IFSC: === |
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