GIFT City Updates (December 2025)

• Amendments to Module No. 16 (Providing Credit) of the IFSCA Banking Handbook – COB Directions v6.0

On December 8, 2025, the International Financial Services Centres Authority (IFSCA) issued a circular amending Module No. 16 (Providing Credit) of the IFSCA Banking Handbook: COB Directions v6.0, which governs the grant of loans and advances by IFSC Banking Units (IBUs). The amendments clarify that the restrictions on loans or advances under Section 20(1) of the Banking Regulation Act, 1949 shall not apply to the IBU of a foreign bank, subject to compliance with the restrictions imposed by the Authority under the relevant module.

The circular also revises the framework governing loans or advances extended to directors of the parent bank or their related parties. IBUs are now required to implement a dedicated policy for such exposures, ensure conflict-free decision-making, maintain arm's length terms, restrict participation of interested inpiduals in approval processes, adhere to exposure thresholds prescribed by the home regulator, conduct periodic audits, and intimate the Department of Banking Supervision of the Authority within fifteen working days of such transactions.

Further, the amended directions permit IBUs to extend credit to companies for the buy-back of their securities, provided that such borrowing is permitted under the laws of the jurisdiction in which the company is incorporated. These amendments are intended to enhance operational clarity while strengthening governance and oversight over credit activities undertaken by IBUs. Click here.

• Implementation of the Banking Laws (Amendment) Act, 2025

On December 12, 2025, IFSCA issued a circular directing all IFSC Banking Units to ensure compliance with the provisions of the Banking Laws (Amendment) Act, 2025. The circular draws attention to the notification issued by the Department of Financial Services appointing November 1, 2025, as the date on which Sections 10, 11, 12 and 13 of the Amendment Act came into force.

IBUs have been instructed to take necessary steps to align their operations with the amended statutory provisions. The circular underscores the applicability of the revised banking law framework to IFSC entities and reinforces the Authority's supervisory expectations regarding statutory compliance by IBUs operating in GIFT IFSC. Click here.

• Internet Banking Services to Clients of IBUs – Review and Revised Compliance Requirements

On December 29, 2025, IFSCA issued a circular reviewing and supplementing the compliance framework applicable to internet banking services offered by IFSC Banking Units. Building upon the earlier circular dated April 22, 2024, the Authority has laid down detailed requirements for information services, interactive information exchange services, and transactional services offered through digital banking platforms.

The circular exempts IBUs that do not offer liability products from implementing certain requirements relating to interactive and transactional services. It also prescribes timelines for existing IBUs to achieve compliance by June 30, 2026, failing which restrictions on onboarding new customers for liability products will apply. Newly established IBUs are prohibited from offering liability products without full compliance.

In addition, the circular mandates explicit customer consent for internet banking services. It also mandates the prominent display of specified currencies in which transactions are being offered by the IBUs including the facility to convert among such currencies. Clear communication regarding applicable cut-off timings for executing transactions along with the value date (date of transaction) too are mandated. The circular introduces detailed functional and security requirements, including unified digital dashboards, machine-readable statements, transaction alerts, dual-layer authentication, user access management, beneficiary whitelisting, automated payout facilities, and validation tools for regulatory and operational checks and various other transactional services. These measures are aimed at enhancing digital resilience, customer protection, and operational transparency within IFSC banking operations. Click here.

• Clarification on Computation of Liquid Net Worth under the IFSCA (Capital Market Intermediaries) Regulations, 2025

On December 30, 2025, IFSCA issued a circular providing clarifications on the computation of "liquid net worth" for capital market intermediaries operating in GIFT IFSC under the IFSCA (Capital Market Intermediaries) Regulations, 2025. The Authority clarified that base minimum capital and interest-free deposits maintained with recognised stock exchanges and clearing corporations, as well as margins maintained in relation to trading activities in the IFSC or under the Global Access framework, shall be considered as part of liquid net worth.

The circular further clarifies that liabilities are excluded from the computation of net worth under the applicable regulatory definition and, accordingly, are not to be considered while calculating liquid net worth. These clarifications are intended to ensure uniformity and regulatory certainty in the assessment of financial adequacy requirements applicable to broker dealers and clearing members in the IFSC. Click here.

• Extension of Deadline for Implementing Revised Norms for Principal Officer and Compliance Officer under the IFSCA (Capital Market Intermediaries) Regulations, 2025

On December 31, 2025, IFSCA issued a circular extending the deadline for implementation of the revised norms relating to the appointment of Principal Officers and Compliance Officers under Regulation 9 of the IFSCA (Capital Market Intermediaries) Regulations, 2025.

In light of proposed amendments to the CMI Regulations approved by the Authority and pending notification, the deadline for compliance with sub-regulations (2), (3) and (8) of Regulation 9 has been extended up to January 15, 2026, or until the date of publication of the IFSCA (Capital Market Intermediaries) (Amendment) Regulations, 2026 in the Official Gazette, whichever is earlier. The extension is intended to provide regulatory continuity and facilitate smooth implementation of the revised governance framework for capital market intermediaries in GIFT IFSC. Click here.

• IFSCA Executes Memorandum of Understanding with the Financial Supervisory Commission, Taiwan

On December 5, 2025, the International Financial Services Centres Authority (IFSCA) announced the execution of a Memorandum of Understanding (MoU) with the Financial Supervisory Commission (FSC) of Taiwan to formalise regulatory cooperation between the two jurisdictions. The MoU was signed by Shri K. Rajaraman, Chairperson, IFSCA and Dr. Yen-Liang Chen, Vice Chairperson, FSC Taiwan, and was operationalised on December 3, 2025, during the 18th India–Taiwan Economic Consultations.

The MoU provides a framework for cooperation in areas such as information sharing on regulatory developments, market structures, and best practices, promotion of fitness and propriety standards for regulated entities, and enforcement of financial laws and regulations. It also facilitates collaboration in the application of financial technology, innovation, and regulatory technology across financial markets. The initiative is aimed at strengthening supervisory coordination and enhancing regulatory standards across both jurisdictions. Click here.

• IFSCA and IIT Gandhinagar Sign MoU to Strengthen Regulatory–Academic Collaboration for GIFT IFSC

On December 16, 2025, IFSCA announced the signing of a Memorandum of Understanding with the Indian Institute of Technology Gandhinagar (IITGN) to enhance collaboration between regulatory institutions and academia in support of the GIFT IFSC ecosystem. The MoU was signed by Shri K. Rajaraman, Chairperson, IFSCA, and Shri Rajat Moona, Director, IIT Gandhinagar.

The collaboration establishes a structured framework for cooperation in areas including policy-relevant research, knowledge exchange, capacity building, entrepreneurship support, and talent development. It focuses on emerging domains such as Financial Technology (FinTech), Artificial Intelligence and Machine Learning (AI/ML), Distributed Ledger Technology, quantum technologies, and regulatory innovation.

The MoU also envisages joint academic and executive education initiatives, including specialised courses, workshops, certifications, hackathons, and innovation challenges, as well as internship opportunities for students and engagement of faculty in IFSCA working groups. The initiative aligns with the broader national vision of fostering innovation-led growth and developing GIFT IFSC as a future-ready international financial hub. Click here.

• Outcomes of the 26th IFSCA Authority Meeting

At its 26th meeting on 22 December 2025, the IFSCA approved a package of regulatory reforms to ease operations and strengthen the GIFT-IFSC ecosystem. These include amendments to the IFSCA (Fund Management) Regulations, 2025 to relax KMP eligibility through certification-based alternatives, expand recognised experience, allow multiple extensions and a one-time revival of Private Placement Memoranda, introduce investor-protection measures for certain open-ended schemes, and provide a 24-month transition for appointing IFSC-based custodians. Further approvals cover amendments to the Capital Market Intermediaries Regulations, 2025 to broaden qualifications, reduce experience and net-worth requirements (including lowering custodian net worth to USD 1 million with transition), permit common principal officers with safeguards, clarify liquid net-worth computation, and introduce an umbrella registration framework, as well as removal of the minimum office space requirement under the Book-keeping, Accounting, Taxation and Financial Crime Compliance Services Regulations, 2024.The Authority also approved the revamped IFSCA (Global In-House Centres) Regulations, 2025, replacing the 2020 framework, to establish a globally aligned regime recognising multiple GIC models, permitting limited servicing of Indian group entities, easing employee transfer caps, enabling third-party and co-delivery models, and streamlining registration, governance and compliance to position GIFT-IFSC as a global hub for high-value services. In addition, amendments to the IFSCA (Registration of Business) Regulations, 2021 were approved to widen the definition of a Lloyd's Service Company, strengthening the insurance ecosystem, with detailed notifications to follow. Click Here.

• Extension of Timeline for Submission of Feedback on the IFSCA (Setting up and Operation of International Branch Campuses and Offshore Education Centres) Regulations, 2022

The International Financial Services Centres Authority (IFSCA), through a public notice dated 5th December 2025, has extended the timeline for submission of feedback and suggestions on the existing IFSCA (Setting up and Operation of International Branch Campuses and Offshore Education Centres) Regulations, 2022. This extension follows the earlier public notice issued on 14 November 2025, which invited comments from the public and market participants, as referred to in paragraph 10 (page 3) of the said notice. In order to allow additional time for stakeholder consultation, the Authority has now revised the deadline for submission of comments and suggestions to 31 December 2025.Click here.

• Frequently Asked Questions (FAQs), under the IFSCA (TechFin and Ancillary Services) Regulations, 2025

IFSCA has issued FAQs under the IFSCA (TechFin and Ancillary Services) Regulations, 2025 to clarify the unified regulatory framework governing technology-driven financial and ancillary service providers operating from GIFT IFSC. The FAQs primarily address the mandatory registration requirement through a Certificate of Registration, the eligibility of entities and legal structures, and the transition of existing FinTech and Ancillary Service providers from earlier frameworks into the new TAS regime. They also outline key compliance timelines, governance requirements, fee obligations, permitted currencies of operation, and the regulatory treatment of sandbox entities, thereby providing operational clarity on how TechFin and Ancillary Services are to be set up, continued and regulated in GIFT City going forward. Click Here.

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