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

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  • Last Updated on 18 August, 2025

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Foreign Currency Account

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.

Click Here To Read The Full Circular 

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied