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Facing challenges with the IFSC banking unit setup in Gift City? Connect with Enterslice for end-to-end assistance with obtaining IFSCA approval, regulatory filings, and ongoing compliance, ensuring a smooth, timely, and fully compliant IBU establishment in GIFT City.
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An IFSC, which is India’s first International Financial Services Centre- Gift City, is a specialised banking unit established to provide financial services to non-residents, foreign entities, and international markets. Unlike traditional domestic bank branches, IBUs primarily deal in foreign currency transactions and are permitted to undertake activities such as offshore leading, trade finance, treasury operations, and cross-border fund management.
An IFSC banking unit setup in Gift City also enables residents to open and maintain foreign currency accounts, subject to the applicable RBI’s liberalised remittance scheme. Connect with Enterslice for end-to-end support in setting up an IFSC banking unit, from eligibility assessment and IFSCA approval to documentation, operational readiness, and ongoing compliance.
End-to-End IBU Setup Readiness
Business Plan-to-Operations Mapping
100% IFSCA-Aligned Documentation & Filing Format
Operational & Compliance Framework Setup
Zero-Last Minute Regulatory Hurdles
Early Identification of Compliance Gaps
Let our specialists ensure a smooth, compliant IFSC IBU setup in Gift City through precise filings, regulatory coordination, and on-time approvals.
The core purpose of IFSC banking unit setup in GIFT City is as follows:
IFSC banking unit (IBU) setup in GIFT City offers key benefits to foreign banks and financial institutions, as discussed below:
The IFSC banking units operating in Gift City enjoy 100% tax exemption on profits, as well as exemptions from dividend distribution tax, securities transaction tax, and capital gains tax.
The IFSC banking unit setup in Gift City offer access to liberalized, business-friendly norms, with faster approvals and greater regulatory flexibility than domestic banking regulations.
IFSC banking unit setup in Gift City enables conducting foreign currency transactions, offshore lending, trade finance, treasury operations, and capital market activities.
The IFSC banking unit setup in Gift City facilitates exchange controls and seamless capital movement for foreign investors, multinational banks, and global financial institutions.
The IFSC banking unit setup helps strengthen an offshore financial ecosystem, thereby enhancing India’s competitiveness against global financial centres.
The IFSC banking unit setup enables banks to operate across Asian, European, and US market hours, thereby effectively bridging global time zones.
The step-by-step process of an IFSC banking unit (IBU) setup in Gift City is as discussed below:
The first step in IFSC banking unit setup in GIFT City requires the applicant bank to conduct internal due diligence, prepare a detailed business plan, assess capital requirements, and ensure compliance with IFSCA norms.
The next step requires the applicant to file an online application along with the prescribed documents, such as a business plan, financial projections, a compliance framework, and details of key personnel to the IFSCA.
The next step requires the applicant to obtain a No Objection Certificate from their home country's regulatory authority, while Indian banks must secure approval from the RBI to establish an IBU.
In the next step, the applicants must obtain approval from the GIFT SEZ authorities, select office space within the IFSC zone, and comply with SEZ operational requirements.
This step includes setting up IT systems, treasury, FX operations, an ALM/KYC framework, and reporting mechanisms in accordance with IFSCA guidelines.
After complying with all regulatory and operational conditions, the IBU receives a final approval from IFSCA and can commence offshore banking operations in foreign currency from GIFT City.
The timeline for IFSC banking unit setup in GIFT City generally ranges from 3 to 6 months, subject to regulatory approvals, the completeness of documents, and operational readiness.
It takes around 3 to 4 weeks to prepare a business plan, a government structure, a risk management framework, and the documents required for IFSCA submission.
It takes around 4 to 6 weeks to obtain an IFSCA In-Principle approval after a thorough review of the proposal and clarifications.
It takes around 3 to 4 weeks for foreign banks to obtain a No-Objection Certificate from their home regulator, while Indian banks require approval from the RBI.
Post-regulatory approvals, it takes around 2 to 3 weeks to secure SEZ approval, finalize office space within GIFT IFSC, and complete basic infrastructure and IT readiness.
Once all conditions are met, IFSCA typically grants final registration within 1 to 2 weeks, allowing IBUs to commence offshore banking operations in foreign currency.
The list of documents required for IFSC banking unit setup in Gift City is as discussed below:
Duly filled common application form (CAF)
Constitutional documents of the company
Audited balance sheets and profit & loss statement for the last 3 years
Proof of minimum capital deposited in the bank
Letter of Comfort/ No Objection Letter from the home regulator
Provisional letter of allotment for space in GIFT SEZ area
Detailed business plan and information on management
Board-cum-legal undertaking in Form-H
Letter of Permission/ Approval from the Development Commissioner
An IFSC banking unit (IBU) undertakes a range of international banking activities similar to traditional banks, with a primary focus on cross-border transactions, foreign currency operations, and global clients. Regulated by the IFSCA, IBUs operate within a globally aligned framework designed for international financial services.
Through an IBU setup, the banks can expand their global footprint by providing internationally aligned banking services, as discussed below:
IBUs accepts deposits and extends loans in foreign currencies primarily to non-residents, international businesses, and overseas institutions.
IBUs provides foreign exchange services, currency conversions, hedging instruments, and treasury operations to support international trade, investment, and risk management.
IBUs offers global treasury management, investment banking, and other financial services for international clients.
IBUs help facilitate international payment solutions, remittances, and settlement services for businesses and institutions engaged in cross-border transactions.
The list of regulatory and operational challenges faced while IBU setup in Gift City is as discussed below:
Talk to Enterslice consultants, and let us help you overcome the challenges with minimum effort.
The penalty for non-compliance with banking in Gift IFSC regulations is as discussed below:
The penalties for non-compliance with NBFC registration guidelines are listed below for your understanding:
The eligibility criteria for the IFSC banking unit (IBU) setup in Gift City are as follows:
What are the Key Requirements to Apply for IFSCA Banking Unit Setup?
Checklist of Applicants Eligible to Apply for IFSC Banking Unit Setup
The key differences between IBUs and traditional banking units are as discussed below:
Let Enterslice help you with the IFSC banking unit setup in GIFT City.
As a leading consulting firm, Enterslice provides end-to-end advisory and regulatory support for setting up IFSC banking units in GIFT City. Connect with our expertise to ensure smooth coordination with regulators, timely approvals, and compliant operational launch. Connect us to learn why Enterslice’s IBU setup consultant in GIFT City is considered the most preferred choice for IBU setup in GIFT City:
Yes, both Indian and foreign banks are eligible to operate by setting up an IFSC banking unit in a GIFT city. These banks act as foreign branches, providing services in foreign currencies to non-residents, residents, and foreign entities.
Yes, prior permission from the Reserve Bank of India is required for eligible Indian and foreign banks seeking IFSC Banking Unit Setup in GIFT City under Section 23 (1)(a) of the Banking Regulation Act, 1949.
The minimum capital requirement for IFSC Banking Unit (IBU) Setup in Gift City is USD 20 million (or the equivalent in a freely convertible foreign currency).
The activities undertaken by an IBU that acts as a foreign branch of an Indian or foreign bank in an International Financial Services Centre include offshore lending/borrowing, trade finance, deposits, and capital market transactions for foreign clients.
IBU accounts in Gift City are designed for non-residents, including NRIs, PIOs, and foreign nationals operating within the IFSC. They primarily offer foreign currency current and term deposit accounts to these individuals, facilitating international trade and investment.
Yes, IFSC banking units, which are branches of banks located in the Gujarat International Finance Tec-City (GIFT City) IFSC, can accept fixed deposits (term deposits). However, these deposits are subject to specific regulations and guidelines for IBUs accepting fixed deposits in freely convertible foreign currencies, deposits from non-bank entities, and fixed deposits with a tenor of less than 1 year.
The financial institutions, including banks, insurance firms, and asset managers, are eligible to establish operations in an International Financial Services Centre (IFSC) in India.
Yes, Indian residents can invest in financial institutions and products in the International Financial Services Centre (IFSC) at GIFT City.
Yes, units in an IFSC can open Special Non-Resident Rupee (SNRR) accounts with authorized dealer (AD) banks in India, for business transactions, as permitted by a January 2025 amendment.
IFSC banking units are required to strictly follow the International Financial Services Centres Authority (Anti-Money Laundering, Counter-Terrorist Financing and Know Your Customer) Guidelines, 2022.
Yes, IFSC banking units in GIFT City can rely on third-party KYC, subject to specific regulatory conditions and strict liability requirements.
No, the foreign investors do not need to open international financial services centre bank accounts in India’s GIFT City.
Yes, Indian banks (including public and private sector banks that deal in foreign exchange) and foreign banks already present in India are permitted to set up an IFSC Banking Unit (IBU).
Yes, IBUs can accept fixed deposits from non-banks, but such deposits cannot be repaid prematurely within the first year.
IFSC banking units facilitate cross-border trade, enhance foreign investment, and provide financial services such as offshore banking, foreign exchange, and investment banking. It further helps integrate India into the global financial system, thereby positioning India as a key global financial hub.
IFSC banking units help attract foreign investments by offering tax incentives, simplified regulations, and a platform for cross-border transactions. These benefits help make India an attractive destination for international financial institutions, thereby increasing capital flows into India’s economy.
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