20. For the purposes of implementation of these regulations and matters incidental thereto, or in order to facilitate and regulate financial services relating to banking and investment activities in an International Financial Services Centre, the Authority may specify norms, procedures, processes, manners or provide relaxations, by way of guidelines or circulars. =============... ... ...

19. A Banking Unit may exchange margins in a freely convertible currency or permissible listed debt securities and sovereigns with a counter party Banking Unit or overseas regulated entity for non-centrally cleared over the counter currency, interest rate, credit and commodity derivative contracts to reflect mark to market exposure under a legally enforceable netting arrangement as may be specified by the Authority. =============... ... ...

CHAPTER VII MISCELLANEOUS 18. There shall be no centralised deposit insurance scheme for deposits of a Banking Unit. =============... ... ...

17. (1) A Banking Unit shall be permitted to have an INR account out of the freely convertible foreign currency to defray their administrative and statutory expenses, and for such other purposes as may be specified by the Authority. (2) A Banking Unit shall maintain separate nostro accounts with correspondent banks, distinct from nostro accounts maintained by other branches of the same Parent Bank in India. =============... ... ...

16. A Banking Unit shall maintain its books of accounts, records and documents in such freely convertible foreign currency, as may be declared at the time of making an application under Regulation 3. =============... ... ...

CHAPTER VI OPERATIONAL REQUIREMENTS 15. (1) A Banking Unit shall be required to furnish information relating to their operations to the Authority, from time to time, and in such manner and form, as may be specified by the Authority. (2) A Banking Unit shall submit reports to the Authority in US Dollar, unless otherwise specified by the Authority. =============... ... ...

CHAPTER V KNOW YOUR CUSTOMER AND ANTI-MONEY LAUNDERING 14. A Banking Unit shall follow Know Your Customer norms, combating of financing of terrorism and other anti- money laundering requirements, including reporting requirements issued by the Reserve Bank from time to time, unless otherwise specified by the Authority. =============... ... ...

13. A Banking Unit may undertake the following activities, subject to compliance with such terms and conditions or guidelines as may be specified by the Authority, including matters relating to design, execution and risk management: (1) Lend in the form of loans, trade finances and acceptances, commitments and guarantees, carry out credit enhancement, credit insurance, and sale and purchase of portfolios; (2) Undertake inter-bank borrowings and lending; (3) Underta... ... ...

12. (1) Cash transactions in foreign currency accounts shall not be permitted. (2) An account in a freely convertible foreign currency may be opened, held and maintained with a Banking Unit in the form of current or savings or term deposit in cases where the account holder is an individual, and in the form of current or term deposit in all other cases, subject to such conditions as may be specified by the Authority. =============... ... ...

11. (1) The following persons are permitted to open, hold and maintain foreign currency accounts with a Banking Unit: (a) Qualified Individuals; (b) Persons resident outside India who are corporate or institutional entities, in the manner as may be specified by the Authority; (c) Persons resident in India, who are corporate or institutional entities, subject to such requirements as may be specified by the Authority; (d) Subject to sub-regulation (2), Quali... ... ...

CHAPTER IV PERMISSIBLE ACTIVITIES 10. A Banking Unit shall conduct such business in freely convertible foreign currencies and with such persons, whether resident or otherwise, as may be specified by the Authority. Provided that a Banking Unit may be permitted to conduct such business in INR with such persons, whether resident or otherwise, as may be specified by the Authority, subject to settlement of the financial transaction in relation to such business in freely convertible forei... ... ...

9. support shall not be available to a Banking Unit. =============... ... ...

8. The liabilities of a Banking Unit, other than the deposits raised from Qualified Individuals and Qualified Resident Individuals, shall be exempt from Cash Reserve Ratio or other such requirements. The deposits raised from Qualified Individuals and Qualified Resident Individuals shall be subject to such reserve ratios as may be specified by the Authority. =============... ... ...

7. A Banking Unit shall be subject to an exposure ceiling of five percent of the Parent Bank's Tier 1 capital in case of a single borrower, and ten percent of Parent Bank's Tier 1 capital in the case of a borrower group. =============... ... ...

6. Banking Unit shall adhere to the norms and guidelines relating to leverage ratio as may be specified by the Authority, from time to time. =============... ... ...

5. (1) A Banking Unit shall maintain the Liquidity Coverage Ratio; Provided that with the Authority's permission, the Liquidity Coverage Ratio may be maintained by the Parent Bank. (2) Net Stable Funding Ratio shall be made applicable to a Banking Unit as and when determined by the Authority and shall be maintained by a Banking Unit; Provided that with the Authority's permission, the Net Stable Funding Ratio may be maintained by the Parent Bank. =============... ... ...

CHAPTER III PRUDENTIAL REGULATORY REQUIREMENTS 4. (1) Banking Units shall adhere to the norms and guidelines as may be prescribed by the Authority, from time to time. (2) Banking Units shall continue to comply with the directions and instructions issued by the Reserve Bank of India as applicable for IFSC Banking Units, unless otherwise specified by the Authority. =============... ... ...

CHAPTER II SETTING UP OF A BANKING UNIT 3. (1) Indian Banks and Foreign Banks shall require licence from the Authority to set up a Banking Unit in an International Financial Services Centre. (2) An application shall be made by the Parent Bank in the form and manner as specified by the Authority. (3) The applicant shall satisfy the following requirements for grant of licence by the Authority: (a) Parent Bank shall provide a minimum capital of USD 20 million or such other ... ... ...

2. (1) In these regulations, unless the context otherwise requires, - (a) "Act" means the International Financial Services Centres Authority Act, 2019 (50 of 2019); (b) "Authority" means the International Financial Services Centres Authority established under sub-section (1) of Section 4 of the Act; (c) "Banking Unit" means a financial institution under clause (c) of sub-section (1) of Section 3 of the Act that is licensed by the Authority to undertake permissible ... ... ...

INTERNATIONAL FINANCIAL SERVICES CENTRES AUTHORITY NOTIFICATION Gandhinagar, the 18th November, 2020 International Financial Services Centres Authority (Banking) Regulations, 2020 IFSCA/2020-21/GN/REG004.-In exercise of the powers conferred by sub-section (1) of Section 28 read with sub-section (1) of Section 12 and sub-section (1) of Section 13 of the International Financial Services Centres Authority Act, 2019, the International Financial Services Centres Authority hereby makes the... ... ...