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Capital Market and Securities Laws · International Financial Services Centres Authority (IFSCA)

Section 31 IFSCA Act 2019: Power to Modify Other Enactments in IFSC

Updated 11 October 2026 · Fact-checked

Section 31 of the IFSCA Act, 2019 lets the Central Government notify that provisions of other Central Acts, and rules, regulations, notifications or orders under them, either do not apply to financial products, services or institutions in an IFSC, or apply with stated exceptions, modifications and adaptations. The draft notification must be laid before Parliament for thirty days.

Understand Power to Modify Other Enactments in IFSC (Section 31)

An International Financial Services Centre (IFSC) is meant to compete with global financial hubs. Many Indian Acts were written for the domestic market. Applying them unchanged inside an IFSC could make business there hard. Section 31 solves this without amending each Act in Parliament.

Under section 31(1), the Central Government may, by notification, direct that any provision of any other Central Act, or of any rules or regulations made under it, or any notification, order or direction issued under it, shall do one of two things for financial products, financial services or financial institutions in an IFSC:

  • not apply (clause (a)); or
  • apply with exceptions, modifications and adaptations specified in the notification (clause (b)).

There is one carve-out. The power does not reach provisions relating to the making of rules or regulations. So the Centre cannot use section 31 to alter the rule-making powers of another Act.

Section 31(2) adds a parliamentary check. A copy of every notification proposed to be issued must be laid in draft before each House of Parliament, while it is in session, for a total of thirty days. This may be in one session or in two or more successive sessions. If, before the expiry of the session immediately following, both Houses agree in disapproving the notification, it is not issued. If both Houses agree on a modification, it is issued only in that modified form.

Note the order. The draft is laid first. The notification is issued afterwards. This differs from many laying provisions, where the rule is made first and laid later. Also note that section 31 was brought into force on 21 August 2020, together with sections 12, 17 to 26, 28 and 32.

Key rules to remember

Power under section 31(1)
Central Government + notification → provision of another Central Act (or its rules, regulations, notifications, orders, directions) either does not apply, or applies with exceptions, modifications and adaptations
Applies only to financial products, financial services or financial institutions in an IFSC.
Excluded matter
Provisions relating to the making of rules or regulations cannot be touched
This is the bracketed exception in section 31(1).
Parliamentary control, section 31(2)
Draft laid before each House for 30 days (one session or successive sessions) → both Houses disapprove: not issued; both Houses modify: issued only as modified
Both Houses must agree. One House alone cannot stop or change it.
Contrast with section 29
Section 29: rules and regulations made under the IFSCA Act are laid after they are made; Section 31(2): the draft notification is laid before it is issued
Do not mix the two laying procedures.

How to solve Power to Modify Other Enactments in IFSC (Section 31) questions

Use this method for any question on section 31, whether it is a short note, a case study or a provision-based question.

  1. 1Identify who acts: the Central Government, not the IFSCA, and the instrument: a notification.
  2. 2State the two options: the provision does not apply (clause (a)) or applies with exceptions, modifications and adaptations (clause (b)).
  3. 3State the scope: any other Central Act, its rules, regulations, notifications, orders or directions, but only for financial products, services or institutions in an IFSC.
  4. 4Mention the exclusion: provisions relating to the making of rules or regulations.
  5. 5Explain the parliamentary control: draft laid for thirty days before each House, with the effect of both Houses disapproving or modifying.
  6. 6Apply the facts: check whether the matter is in an IFSC, is a financial product, service or institution, and is a Central Act.
  7. 7Write a clear conclusion, citing section 31 of the International Financial Services Centres Authority Act, 2019.

Quickest way: Four-point recall: Who, What, Where, Check

When to use it: Use when you have little time, such as a short-note question worth a few marks.

  1. Who: Central Government, by notification.
  2. What: another Central Act or its rules, regulations, notifications, orders, directions: not applicable, or applicable with exceptions, modifications and adaptations.
  3. Where: financial products, services or institutions in an IFSC only.
  4. Check: draft laid before both Houses for thirty days; both Houses disapproving means not issued; both agreeing to modify means issued as modified.

Common mistakes in Power to Modify Other Enactments in IFSC (Section 31)

  • Saying the IFSCA modifies other Acts under section 31.

    Students link everything in the chapter to the Authority.

    Fix: Remember that section 31 gives the power to the Central Government. The Authority exercises regulators' powers under section 13.

  • Saying the notification is laid after it is issued.

    Most laying clauses work that way, so students assume the same here.

    Fix: Section 31(2) speaks of a notification proposed to be issued, laid in draft. It is issued only after the process.

  • Saying one House can disapprove the notification.

    Students overlook the words 'both Houses agree'.

    Fix: Write that both Houses must agree, either to disapprove or to modify.

  • Saying the power allows the Centre to repeal or amend another Act.

    Confusing modification for IFSC with amendment of the Act.

    Fix: The notification only makes the provision not apply, or apply with modifications, in an IFSC. The Act itself stays as it is elsewhere.

  • Ignoring the limit to financial products, services or institutions and to Central Acts.

    Students remember the power as general.

    Fix: Always state both limits: Central Acts only, and only for financial matters in an IFSC.

  • Omitting the exclusion for provisions on making rules or regulations.

    It sits in a bracket and is easy to skip.

    Fix: Add one line stating that rule-making provisions are outside the power.

Worked examples

Example 1

Explain the power of the Central Government under section 31 of the IFSCA Act, 2019 to modify the application of other enactments in an International Financial Services Centre. What safeguard has Parliament been given?

Show the solution
  1. Provision: section 31(1) allows the Central Government, by notification, to direct that provisions of any other Central Act, or rules, regulations, notifications, orders or directions under it, will operate differently in an IFSC.
  2. Two options: under clause (a) the provision shall not apply to financial products, services or institutions in an IFSC; under clause (b) it applies with specified exceptions, modifications and adaptations.
  3. Limit: provisions relating to the making of rules or regulations cannot be covered.
  4. Safeguard: under section 31(2), the draft notification must be laid before each House for thirty days, in one session or successive sessions.
  5. Effect: if both Houses agree in disapproving it before the expiry of the session immediately following, it is not issued. If both agree to modify it, it is issued only in the modified form.

Answer: The Central Government may notify that other Central Act provisions do not apply, or apply with modifications, to financial products, services and institutions in an IFSC, except rule-making provisions. The draft must be laid before both Houses for thirty days, and both Houses can stop it or modify it.

Example 2

The Central Government proposes a notification under section 31 so that a provision of a Central Act on a financial service applies to an IFSC unit only with certain adaptations. Both Houses agree to a change in the draft. Can the notification be issued, and in what form?

Show the solution
  1. Power: the proposal falls under section 31(1)(b), which permits application with exceptions, modifications and adaptations for financial services in an IFSC.
  2. Procedure: under section 31(2), the draft must be laid before each House for thirty days.
  3. Parliament's action: both Houses agreeing to make a modification, before the expiry of the session immediately following, is the case covered by section 31(2).
  4. Consequence: the notification shall be issued only in the modified form agreed upon by both Houses.
  5. Conclusion: it can be issued, but not in its original draft form.

Answer: Yes, the notification can be issued, but only in the form modified as agreed by both Houses under section 31(2).

Exam tips

  • Write the section number and Act name in the first line: section 31 of the International Financial Services Centres Authority Act, 2019.
  • Always give both clauses: not apply, and apply with exceptions, modifications and adaptations.
  • Mention the thirty-day laying of the draft and the words 'both Houses'. Examiners look for them.
  • For a case study, check the three conditions: Central Act, financial matter, IFSC. Then conclude.
  • Keep section 31 apart from section 29, which covers rules and regulations under the IFSCA Act itself.

Practice questions from International Financial Services Centres Authority (IFSCA)

Power to Modify Other Enactments in IFSC (Section 31) in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Power to Modify Other Enactments in IFSC (Section 31): frequently asked questions

Who has the power under section 31 of the IFSCA Act?

The Central Government. It acts by notification. The International Financial Services Centres Authority does not have this power.

Does section 31 let the Centre change the Companies Act or SEBI Act permanently?

No. It only directs that provisions of a Central Act do not apply, or apply with exceptions and modifications, to financial products, services or institutions in an IFSC. The Act itself is not amended.

What happens if Parliament disagrees with a proposed notification?

The draft is laid for thirty days. If both Houses agree in disapproving it before the expiry of the session immediately following, it is not issued. If both agree on a modification, it is issued only as modified.

Is section 31 different from section 13?

Yes. Section 13 gives the Authority the powers of listed regulators in an IFSC. Section 31 lets the Central Government adjust how other Central Acts apply in an IFSC.