Skip to content

CS Professional · IFSCA - Regulations, Listing and Compliances · International Financial Services Centres: An Introduction

Aarav Fintech Pvt Ltd runs a unit in GIFT City that accepts deposits from customers and also offers credit arrangements. Under the IFSCA Act, 2019, how is this unit best classified?

The unit is a financial institution. The Act defines that term as a unit set up in an IFSC and engaged in rendering financial services in respect of any financial product, and accepting deposits and offering credit arrangements are financial services involving financial products.

  1. AA financial institution, because it is a unit set up in an IFSC engaged in rendering financial services in respect of a financial productCorrect
  2. BAn appropriate regulator, because it accepts deposits within the IFSC
  3. CA financial product, because it deals in deposits and credit arrangements
  4. DAn Authority, because it operates inside the International Financial Services Centre

Explanation

The Act defines a financial institution as a unit set up in an IFSC that is engaged in rendering financial services in respect of any financial product. Acceptance of deposits is a financial service, and deposits and credit arrangements are financial products. The unit is therefore a financial institution, not a regulator, product or the Authority.

Did you get it right without looking?

One question tells you little. A timed set on International Financial Services Centres: An Introduction shows your real accuracy, how long you take and where you lose marks.

Practise International Financial Services Centres: An IntroductionFree diagnostic mock

More International Financial Services Centres: An Introduction questions