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CS Professional · IFSCA - Regulations, Listing and Compliances · Banking Services and Finance Companies in IFSC

Arjun Capital IFSC Ltd, a Finance Company, wishes to start a new permitted line, factoring, in addition to its existing lease financing. What is the correct compliance position?

It must obtain IFSCA's approval or registration for the additional activity before commencing. A Finance Company may carry on only the activities authorised by IFSCA, so adding factoring needs regulatory permission, not an RBI licence and not unilateral action.

  1. AIt can begin immediately without informing anyone
  2. BIt needs an RBI licence for factoring
  3. CIt must stop lease financing first
  4. DIt must seek IFSCA approval or registration for the additional activity under the regulations before commencingCorrect

Explanation

A Finance Company operates within the activities for which it is registered with IFSCA. Adding a further specified activity requires IFSCA's permission or registration, not unilateral commencement. RBI has no role for IFSC unit activities, and no rule forces discontinuing existing business.

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