The International Financial Services Centres Authority on 10th May 2021 has notifies the guidelines on issuance of certificate of deposits in which the banking units may issues CDs denominated in any convertible foreign currency and up to the amount depending on their funding requirements.
The Minimum amount of a CD should be USD 2500 or equivalent in any convertible foreign currency. The Banking units may issue CDs to persons resident in India and persons resident outside India as defined in the Foreign Exchange Management Act,1999.Qualified Individual (‘QI’) or Qualified Resident Individual (‘QRI’)shall not be applicable for investment in CDs.
The maturity period of CDs issued by BUs should not be less than 7 days and not more than one year, from the date of issue. There shall be no lock-in period for the CDs other than the minimum maturity period.
Since CDs are transferable, the physical certificates may be presented for payment by the last holder. BUs shall take necessary precautions to verify the chain of transfers and make payment only by credit to the account of the presenter held with them or with another BU or with the branch of a bank outside IFSCA. In case of payment to an account held in another BU or with the branch of a bank outside IFSCA, the BU shall obtain complete details of the payee and such bank accounts and keep them on record.
