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

The IBU of Kaveri Bank at GIFT IFSC discovers that it has breached a prudential limit prescribed by IFSCA. What is the correct compliance step?

The IBU should promptly report the breach to IFSCA, its regulator, and take corrective action. Waiting for inspection, informing only RBI, or relying on the parent bank's strength is wrong, because the IBU must comply with IFSCA prudential limits itself.

  1. AWait for the annual inspection before informing anyone
  2. BReport the breach to the parent bank's RBI regional office only
  3. CReport the breach to IFSCA as the regulator of the IBU and take corrective actionCorrect
  4. DIgnore it if the parent bank is adequately capitalised

Explanation

IFSCA is the regulator of the IBU and expects reporting of non-compliances and rectification. Delaying until inspection or reporting only to RBI misplaces the regulator. Parent strength does not excuse a breach of IBU limits.

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