IFSCA Directs IBUs to Comply With Banking Laws Amendment Act, 2025

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  • Last Updated on 16 December, 2025

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Banking Laws Amendment Act

Circular e-File. No. IFSCA-FMPP0BR/35/2025-Banking, Dated 12.12.2025

1. Background

The International Financial Services Centres Authority (IFSCA) has issued a circular drawing the attention of International Banking Units (IBUs) to a notification issued by the Department of Financial Services (DFS). The notification appoints November 1, 2025 as the date for commencement of certain provisions of the Banking Laws (Amendment) Act, 2025.

The circular emphasises that IBUs operating in IFSCs must ensure full compliance with the newly enforced statutory provisions from the notified date.

2. Provisions Coming Into Force

The DFS notification brings into effect the following sections of the Banking Laws (Amendment) Act, 2025:

  • Section 10
  • Section 11
  • Section 12
  • Section 13

These provisions amend aspects of the Banking Regulation Act, 1949 and related banking laws, impacting governance, regulatory oversight, and operational requirements applicable to banking entities.

3. Applicability to International Banking Units

IFSCA has clarified that:

  • The enforcement of the above provisions is equally applicable to IBUs
  • IBUs must review the amended provisions and align their policies, procedures, and governance frameworks accordingly
  • Any operational, compliance, or reporting changes arising from the amendments must be implemented on or before November 1, 2025

4. Legal Authority for the Directions

The circular has been issued under the powers conferred by:

  • The IFSCA Act, 2019, read with
  • The Banking Regulation Act, 1949

This confirms IFSCA’s supervisory jurisdiction over IBUs in respect of compliance with central banking legislation as amended from time to time.

5. Regulatory Intent

The directive aims to:

  • Ensure regulatory uniformity between domestic banking entities and IBUs
  • Facilitate smooth implementation of the Banking Laws (Amendment) Act, 2025
  • Strengthen prudential governance and statutory compliance within IFSC banking operations
  • Avoid transitional gaps or non-compliance due to delayed adoption of amended provisions

6. Compliance Takeaways for IBUs

International Banking Units should:

  • Conduct a gap analysis of existing practices vis-à-vis sections 10–13 of the amended Act
  • Update internal policies, SOPs, and governance documents
  • Train compliance and operations teams on the new requirements
  • Ensure readiness for IFSCA supervisory review post-implementation

Failure to comply may attract regulatory observations, directions, or enforcement action under the applicable IFSC regulatory framework.

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