IFSCA Payment Systems – IBUs Gain Approval-free Global Access

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  • Last Updated on 24 May, 2025

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IFSC Banking Units international payment systems

Circular E.File.No.IFSCA-FMPP0BR12/2023/Banking-Part(2), Dated 21.05.2025

1. Regulatory Snapshot

  • Circular No. IFSCA-FMPP0BR12/2023 (22 May 2025)* titled “Participation of IFSC Banking Units in International Payment Systems.”
  • Applies to all IFSC Banking Units (IBUs) operating in GIFT City.
  • Objective – streamline cross-border payments by IBUs while keeping domestic (intra-IFSC) transfers under direct IFSCA oversight.

2. Compliance & Reporting Obligations for IBUs

  • 30-Day Self-Review– Every IBU must reassess its current memberships and confirm compliance with the new circular.
  • Intimation to IFSCA – Submit a return to the Department of Banking Supervision within 30 days stating:
    1. List of all international payment systems it participates in (status as on 31 March 2025).
    2. Confirmation that each system is used solely for permitted cross-border legs, or else attach approval letter for domestic use.
  • Ongoing Updates – Future additions or exits must be intimated within 15 days of the change.

3. Risk-Management Expectations

  • AML/CFT – Ensure correspondent arrangements embed robust KYC/sanctions screening consistent with the IFSCA AML-CTF Guidelines, 2022.
  • Tech & Cyber Security – Follow IFSCA’s 2023 cyber-resilience framework when integrating API or messaging links with the foreign system.
  • Settlement Exposure – IBUs should quantify and monitor daylight/overnight positions arising from time-zone differences.

4. Conclusion

From 22 May 2025, IFSC Banking Units are free to hook into global payment networks for cross-border settlements, but any system that lets them pay other IBUs inside GIFT-City still needs an IFSCA sign-off. IBUs should audit existing links, file the mandated disclosure within 30 days, and build internal controls to separate offshore and onshore payment flows.

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