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

Kaveri Bank, a foreign bank with a branch in India, wishes to start an IBU in GIFT IFSC. Which statement about the regulatory approach is correct?

Kaveri Bank must seek authorisation from IFSCA, which is the unified regulator of financial services in the IFSC. RBI or SEBI do not grant the IBU licence, and foreign banks are not exempt from authorisation requirements.

  1. AOnly RBI may grant the licence, and IFSCA has no role
  2. BIt must apply to IFSCA for authorisation to operate the IBU, with the IFSCA being the unified regulator of the IFSCCorrect
  3. CNo authorisation is needed for foreign banks
  4. DSEBI grants the licence for all banking units in IFSC

Explanation

The IFSCA Act, 2019 makes IFSCA the unified regulator for financial products and services in IFSCs, so banking units are authorised and regulated by it. RBI and SEBI do not issue the IBU authorisation.

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