RBI Modified Terms for IFSC Codes

The Reserve Bank of India (RBI)  modified some of its "terms and conditions" for setting up of IFSC (International Financial Services Centres) Banking Units (IBUs), said a notification from the central bank.

The modifications are based on the suggestions the RBI has received from the stakeholders.

"With a view to enabling IBUs to start their operations, the parent bank will be required to provide a minimum capital of $20 million or equivalent in any foreign currency to its IBU which should be maintained at all times," the RBI said in the notification.

"However, the minimum prescribed regulatory capital, including for the exposures of the IBU, shall be maintained on an on-going basis at the parent level, as per regulations in the home country, and the IBU shall submit a certificate to this effect obtained from the parent on a half-yearly basis to RBI.

"The parent bank will be required to provide a Letter of Comfort for extending financial assistance, as and when required, in the form of capital or liquidity support to IBU," the notification said.

In April 2015, the Reserve Bank had formulated a scheme for setting up of IBUs by banks at Gujarat International Finance Tec-City (GIFT) in Gandhinagar.