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

Meridian Bank, an Indian scheduled commercial bank, wants to offer foreign currency loans to non-resident corporates from GIFT City. Under the IFSCA (Banking) Regulations, 2020, through which form of presence can it carry on this business in the IFSC?

The bank should set up an IFSC Banking Unit (IBU). An IBU is a separate unit of the parent bank that carries on permitted banking business in foreign currency in the IFSC, under IFSCA authorisation. A DTA branch is not the prescribed route.

  1. AAn IFSC Banking Unit (IBU) set up as a separate business unitCorrect
  2. BA branch within the Domestic Tariff Area treated as an IFSC office
  3. CA subsidiary registered only under the Payment and Settlement Systems Act
  4. DA representative office accepting rupee deposits

Explanation

Banks from India or abroad operate in the IFSC through an IFSC Banking Unit, a separate business unit of the bank dealing in permitted foreign currency business. A DTA branch or a rupee-deposit representative office is not the prescribed vehicle for IFSC banking business.

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