International Financial Services Centres Authority (IFSCA) has issued a notice seeking to sensitise Authorised Dealer (AD) branches of Indian banks about facilities in IFSC.
The IFSCA observed that an onshore branch of an AD Bank was refusing to route a foreign exchange transaction through the IFSC Banking Unit (IBU). This refusal was on account of a lack of clarity by the branch on whether IBUs fall within the definition of “a foreign branch of Indian bank”.
Hence, the IFSCA is directing heads of the banking units of Indian banks to undertake structured sensitisation programmes for staff of the AD branches of your bank to make them aware of the legal and regulatory status of IBUs. They should also be made aware of transactions that may be routed through IBUs instead of foreign branches of Indian banks.
Moreover, a quarterly report, starting from the quarter ending on 30th June, 2023, should be submitted to the Authority, within 10 days of the end of the quarter. This report should indicate the number of sensitisation programmes conducted during the quarter.
IBU Heads are directed to give top priority to the contents of the circular. The support of the IFSCA may be sought, if needed, in the form of participation of IFSCA officials as speakers in such programmes.