IFSCA Allows IBUs to Open Foreign Currency Accounts for Residents Without Prior Approval

Circular e-file No. IFSCA-FMPP0BR/4/2024-Banking, Dated: 13.08.2025

Clarification on Foreign Currency Accounts

The IFSC Authority has issued a clarification regarding the scope of the term “foreign currency account with a bank outside India”. It has now been specified that this definition also covers accounts maintained with International Banking Units (IBUs) in designated foreign currencies.

Alignment with FEMA 2015 Provisions

This clarification has been made under the framework of the Foreign Exchange Management Act (FEMA), 2015. By extending the scope to IBUs, the circular aligns the regulatory interpretation with the operational role of IBUs in facilitating international financial transactions.

Opening of Accounts Without Prior Approval

Under the updated position, International Banking Units are now permitted to open foreign currency accounts for persons resident in India without the need for prior regulatory approval. This move significantly simplifies the process, reduces administrative hurdles, and facilitates greater ease of doing business.

Immediate Effectiveness of the Circular

The circular has been made effective immediately upon its issuance. This ensures that both IBUs and residents can take advantage of the clarified framework without delay, thereby promoting smoother access to international banking facilities within the IFSC ecosystem.

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