IFSCA Allows IIOs to Raise Reinsurance Invoices in Contract Currency Including INR

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IFSCA reinsurance invoicing clarification

Circular no. eF.No. 103/IFSCA/Ins/CIRC/1/2021; Dated: 27.11.2025

The International Financial Services Centres Authority (IFSCA) has released a clarification regarding the issuance of invoices by IFSC Insurance Offices (IIOs) engaged in reinsurance transactions. The move aims to remove ambiguity surrounding permissible invoicing practices and ensure compliance with currency regulations applicable in IFSCs.

1. Issuance of Invoice in Contract Currency

IFSCA has clarified that an IIO transacting reinsurance business may issue invoices to the following entities:

  • Indian insurers
  • Foreign insurers
  • Reinsurers

Such invoices may be raised in the currency of the underlying reinsurance contract, which may include:

  • Any foreign currency
  • Indian Rupees (INR)

This flexibility ensures that invoice issuance aligns with international reinsurance contracting practices.

2. Mandatory Realisation in Specified Foreign Currencies

While invoices may be raised in INR or foreign currency, IFSCA has mandated that the realisation of the invoice amount must take place only in the specified foreign currencies permitted for IFSC transactions.

Key requirement:

  • The payment must be credited to the IIO’s bank account maintained with any International Banking Unit (IBU).
  • Such credit must be received in the designated foreign currencies as prescribed under IFSC guidelines.

This ensures that foreign exchange management standards applicable to IFSC entities remain consistent, even when invoicing occurs in INR.

3. Objective and Impact of the Clarification

  • Aligns invoicing practices with international reinsurance market norms
  • Provides operational flexibility to IIOs
  • Ensures compliance with IFSC currency realisation requirements
  • Reduces ambiguity for Indian and foreign insurers engaged with IIOs
  • Strengthens ease of doing business within IFSC

4. Conclusion

IFSCA’s clarification brings greater clarity and uniformity to the invoicing and settlement practices of IFSC Insurance Offices. By allowing invoices in contract currency—including INR—while mandating foreign currency realisation, the Authority balances operational flexibility with regulatory prudence.

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