MoF, vide notification dated February 28, 2024, applied certain provisions of the Banking Regulation Act, 1949 ("Banking Regulation Act"), with modifications, to financial products, financial services or financial institutions in IFSCs. The prescribed limits on holding shares in any company will not apply to an IFSC banking unit of a foreign bank for a transaction entered in the ordinary course of business or if the shareholding or interest acquired or held in the course of satisfaction of debts due to it, is disposed of within 5 (five) years. Further, the restrictions to grant any loans or advances or entering into any commitment for granting any loan or advances does not apply to those made by an IFSC banking unit of a foreign bank either (a) on the security of its own shares; (b) to or on behalf of any of its directors; (c) firms in which directors hold substantial interest or any company (not being subsidiary or registered under section 25 of the Companies Act, 1956 or a government company) or a director of a banking company who is an interested director (as a director, manager, managing agent, etc.); or (d) any individual in respect of whom any of its directors is a partner or guarantor.
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