IFSCA Amends Internet Banking Rules for IBUs

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  • Last Updated on 3 July, 2026

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Internet Banking Services for IBUs

Circular No. e.F.No. IFSCA-FMPP0BR/5/2024-Banking /1; Dated: 30.06.2026

IFSCA has amended the circular titled ‘Internet Banking Services to Clients of IBUs – Review’ to prescribe compliance timelines for IFSC Banking Units (IBUs) that had commenced operations before the issuance of the circular.

The amendment requires such IBUs to ensure compliance with the specified requirements by July 31, 2026.

1. Compliance Timeline for Existing IBUs

The amendment applies to IBUs that had already commenced operations before the circular’s issuance date.

Such IBUs are required to comply with the requirements set out in the circular by July 31, 2026.

2. Consequences of Non-Compliance

If an IBU fails to comply with the specified requirements within the prescribed timeline, restrictions will take effect on August 1, 2026.

From that date, the non-compliant IBU must cease onboarding new customers for liability products for which it does not meet the requirements of the circular.

3. Restriction Limited to Non-Compliant Products

The restriction applies specifically to the liability products for which the IBU is non-compliant.

This means the prohibition on onboarding new customers will be linked to the IBU’s product-level compliance status.

4. Objective of the Amendment

The amendment seeks to:

  • Provide a clear compliance timeline for existing IBUs;
  • Ensure adherence to requirements relating to internet banking services;
  • Strengthen customer onboarding and service standards;
  • Promote regulatory discipline among IBUs; and
  • Protect clients using internet banking services offered by IBUs.

5. Expected Impact

The amendment is expected to ensure timely compliance by IBUs offering internet banking services to clients. It also creates a clear consequence for non-compliance by restricting new customer onboarding for affected liability products.

6. Key Takeaway

IFSCA has amended the circular titled ‘Internet Banking Services to Clients of IBUs – Review’. IBUs that commenced operations before the circular was issued must comply with the specified requirements by July 31, 2026. Failure to comply will require the IBU, from August 1, 2026, to stop onboarding new customers for liability products for which it remains non-compliant.

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