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

Nirvana Wealth Pvt Ltd, a unit in GIFT City, wants to know whether it counts as a 'financial institution' under the IFSCA Act, 2019. It is set up in the International Financial Services Centre and offers portfolio management to clients for a fee. Which description fits the Act's definition?

Under the IFSCA Act, 2019, a financial institution is a unit set up in an International Financial Services Centre that renders financial services in respect of any financial product. Nirvana, an IFSC unit offering portfolio management, fits this definition; it need not be a bank or located outside the IFSC.

  1. AA unit set up in an IFSC that is engaged in rendering financial services in respect of any financial productCorrect
  2. BAny company registered in India that deals in securities, wherever located
  3. COnly a bank that accepts deposits within an IFSC
  4. DAny entity notified by the RBI as a financial sector regulator

Explanation

The Act defines a financial institution as a unit set up in an International Financial Services Centre which is engaged in rendering financial services in respect of any financial product. Nirvana is an IFSC unit managing assets for others, so it qualifies. Location outside the IFSC or limiting to deposit-taking banks is not the test.

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