<\/span><\/h2>\n\n\n\nThe\nfollowing points are the benefits and key feature of IFSCA :<\/strong><\/p>\n\n\n\n- Unification under one authority: <\/strong>IFSCA will unify all the banking, insurance sectors, capital markets in IFSC as all are regulated by these multiple regulators – the SEBI,RBI, and IRDAI and now will be integrated under the authority of IFSC.<\/li>
- The regulatory institution of the single window would\u00a0now speed up the development of India’s first IFSC at<\/strong>\u00a0Gandhinagar.<\/li>
- Both the national and international institutions<\/strong>\u00a0that deal with the services of international financials shall make use of the platform of IFSC for outbound and\u00a0inbound investments with enhanced ease of doing business,<\/strong>\u00a0in this manner making the GIFT IFSC a\u00a0universal financial hub.<\/strong><\/li><\/ol>\n\n\n\n
Prudential Regulatory Requirements of IFSCA<\/strong><\/p>\n\n\n\n- Applicable\nprudential regulations<\/strong> -The prudential\nregulations that shall be applicable according to the key feature of IFSCA to\nthe Finance Unit or the Finance Company, shall be such as may be prescribed by\nthe Authority.<\/li>
- Capital Ratio\n(CR)<\/strong> \u2013 the Financial Company or any\nFinancial Institution in accordance with the regulation shall have to maintain the\nminimum capital ratio which should be of eight per cent <\/em>of its capital\nof regulatory to risk-weighted assets or as may be specified by the Authority\nregarding such percentage.<\/li>
- Liquidity\nCoverage Ratio (LCR)<\/strong> – As may be\ndecided by the Authority it is obligatory on the Financial Company or the financial\ninstitution at all times as the case may be, to maintain the liquidity coverage\nratio on stand-alone basis. The proviso applies to <\/em>the Finance\nUnit, where the parent entity shall maintain the LCR only with the specific\napproval of the authority.<\/li>
- Exposure\nCeiling (EC)<\/strong> – In accordance with\nthe case the total sum of all the exposures of the Financial Company or any\nfinancial institution to any single counterparty or the group of associated\ncounterparties shall not go beyond twenty-five percent <\/em>of the existing\neligible capital base without the authority\u2019s approval.<\/li><\/ul>\n\n\n\n
Explanation: <\/strong><\/em>The operational guidelines shall be issued by the\nAuthority with reference to the execution of the requirements as the key\nfeature of IFSCA given under sub-regulations (1) to (4) of regulation.<\/p>\n\n\n\n<\/span>Few other key feature of IFSCA<\/span><\/h2>\n\n\n\n- In\naccordance with the case as permitted by the Authority the key feature of IFSCA\nincludes that the Finance Company or any Financial institution shall carry its function\nin a freely convertible foreign currency and with such individuals, including\nresident or non- residents.<\/li>
- A Finance Company or\na Financial institution shall be allowed to have an INR account from the freely\nconvertible foreign currency with the purpose to bear the expenses of their\nadministrative and statutory sector and for such other purposes as prescribed\nby the Authority. <\/li>
- Every Financial\nCompany and the financial institution shall mandatorily follow the norms of\nKnow Your Customer, which aims for the purpose of combating of requirements of\nanti-money laundering and financing of terrorism, including requirements of\nreporting, as prescribed for the Banking Unit in IFSCs.<\/li><\/ul>\n\n\n\n
<\/span>Conclusion<\/span><\/h2>\n\n\n\nAny entity shall start its business as the Financial Company or as a Financial Unit, in the International Financial Services Centres (IFSCs) only after attaining the registration certificate from the Authority for proceeding with the activities prescribed in the Schedule to the regulations. Therefore, these institutions must get itself registered and comply with the key feature of the regulation in order to carry out activities according to IFSCA.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Government via notification has brought the International Financial Services Centres Authority (Finance Company) Regulations, 2021 where the provisions related to registration, exposure ceiling, capital ratio, permissible activities, Corporate Governance, currency of operations, disclosure requirement and know your customers have been discussed in details. International Financial Services Centres Authority (IFSCA) permitted the inclusion of investment […]<\/p>\n","protected":false},"author":7,"featured_media":4581,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[612],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/4579"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=4579"}],"version-history":[{"count":10,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/4579\/revisions"}],"predecessor-version":[{"id":4679,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/4579\/revisions\/4679"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/4581"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=4579"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=4579"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=4579"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}