IFSCA Payment Systems – IBUs Gain Approval-free Global Access

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. 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