[Image omitted. See the official document.]
CIRCULAR
F. No. IFSCA/24/2024-Banking-FC/01
April 04, 2025
To,
All Finance Company / Finance Unit in the International Financial Services Centres (IFSCs)
Madam/Sir,
Framework for Finance Company/Finance Unit undertaking the activity of Global/ Regional Corporate Treasury Centres
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A. In exercise of the powers conferred by sub-section (1) of section 28, read with sub-section (1) of Section 12 and sub-section (1) of Section 13 of the International Financial Services Centres Authority Act, 2019, the International Financial Services Centres Authority vide Notification dated March 25, 2021, had notified International Financial Services Centres Authority (Finance Company) Regulations, 2021 (hereinafter referred to as the “FC Regulations”).
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B. The FC Regulations enable a Finance Company/Finance Unit set up in an International Financial Services Centre to undertake permissible activities, as specified under sub-regulation (1) of regulation 5, including ‘Global/Regional Corporate Treasury Centres’.
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C. In order to operationalise a Finance Company/Finance Unit desirous to undertake the activity of Global/Regional Corporate Treasury Centres, the Authority, had issued the ‘Framework for undertaking Global/Regional Corporate Treasury Centres Activities by Finance Company/Finance Unit in IFSC’ through a circular dated June 25, 2021.
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D. In order to encourage ease of doing business and bring alignment with international best practices, the Authority, in supersession of the Framework at C above, hereby issues an updated Framework for Finance Company/Finance Unit undertaking the activity of Global/ Regional Corporate Treasury Centres (“Framework”).
CHAPTER 1
PRELIMINARY
1. Applicability and commencement
- (1) This Framework shall apply to:
- (a) an entity desirous of seeking registration as a Finance Company or Finance Unit under the FC Regulations, to undertake the activity Global/Regional Corporate Treasury Centre (“GRCTC”);
- (b) a unit registered as a Finance Company/Finance Unit under the FC Regulations, for undertaking the activity of GRCTC.
- (2) This Framework shall come into force from the date of issuance of this Circular.
2. Definitions
- (1) In this Framework, unless the context otherwise requires, the terms defined herein shall bear the meanings as assigned below, and their cognate expressions and variations shall be construed accordingly.-
- (a) “Act” means the International Financial Services Centres Authority Act, 2019 (50 of 2019);
- (b) “Authority” means the International Financial Services Centres Authority established under sub-section (1) of Section 4 of the International Financial Services Centres Authority Act, 2019;
- (c) “Certificate of Registration” means the certificate granted by the Authority to a Finance Company/Finance Unit under sub-regulation (7) of regulation 3 of the FC Regulations, to undertake the activity of GRCTC;
- (d) “Group Entities” means an arrangement involving two or more entities related to each other through any of the following relationships: (i) subsidiary – parent (as defined in Ind-AS 110/Accounting Standard 21); (ii) joint venture (as defined in Ind-AS 28/Accounting Standard 27); (iii) associate (as defined in Ind-AS 28/Accounting Standard 23); (iv) related party (as defined in terms of Ind-AS 24/ Accounting Standard 18), (v) common brand name or (vi) investment in equity shares of 20 per cent and above;
- (e) “Holding company” means a Finance Company which carries on the business of acquiring equity shares or preference shares of its group entities or investing in the bonds, debentures, debt or loans of its group entities, or such other activity as permitted by the Authority;
- (f) “Owned Fund” means the paid-up-capital and free reserves, balance in share premium account and capital reserves representing surplus arising out of sale proceeds of assets, excluding reserves created by revaluation of asset, as reduced by accumulated loss balance, book value of intangible assets and deferred revenue expenditure, if any;
- (g) “Parent” means:
- (i) in relation to a Finance Company, any entity or a group of entities, being group entities, desirous to set up a Finance Company to undertake the activity of GRCTC;
- (ii) in relation to a Finance Unit, an entity desirous to set up a branch to undertake the activity of GRCTC;
- (h) “Permissible activities” means activities specified under clause 13 of the Framework;
- (i) “Single Window IT System (SWIT)” refers to an online platform designed, inter-alia, to facilitate the processing of applications submitted by the applicant for obtaining registration from the Authority;
- (j) “Specified foreign currency” means the currency specified in the First Schedule of the International Financial Services Centres Authority (Banking) Regulations, 2020, or any other regulation notified by the Authority;
- (2) Words and expressions used and not defined in the Framework but defined in the Act or Acts mentioned in the First Schedule to the Act, or Companies Act, 2013 (18 of 2013), or any rules or regulations made thereunder shall have the same meanings respectively assigned to them under those Acts, rules or regulations or any statutory modification or re-enactment thereto, as the case may be.
CHAPTER II
REGISTRATION FOR UNDERTAKING THE ACTIVITY OF GRCTC
3. Conditions for Grant of Registration
- (1) An entity desirous to commence the activity of GRCTC (hereinafter referred to as “the applicant”) shall apply to the Authority for obtaining a registration as a Finance Company/Finance Unit under sub-regulation (4) of regulation 3 of the FC Regulations.
- (2) The Applicant shall, at the time of submitting the application, meet the following conditions, namely:
- (i) the Applicant possesses or undertakes to set up the necessary infrastructure in IFSC including adequate office space, equipment, and communication facilities to undertake the permissible activities;
- (ii) the Applicant undertakes to employ at least five (5) qualified personnel, based in IFSC, to undertake the permissible activities including the Head of Treasury and the Compliance Officer before commencement of operations;
- (iii) the Applicant demonstrates the ability to meet the owned fund requirements specified under clause 6 of the Framework to the satisfaction of the Authority;
- (iv) the Parent of the Applicant is from a jurisdiction which has not been identified in the public statement of Financial Action Task Force (FATF) as “High Risk Jurisdiction – subject to call for action”;
- (v) the Applicant and its Key Managerial Personnel and persons exercising control over it (hereinafter collectively referred to as “Relevant Persons”) satisfy the ‘fit and proper’ requirements specified in this Framework;
- (vi) the Applicant has not, during one year prior to the date of submission of the application, been refused authorisation or registration by the Authority.
4. Application for Registration
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(1) The Applicant shall submit the application for registration through the SWIT at https://swit.ifsca.gov.in/.
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(2) The Applicant, along with the application, shall provide a list of its Service Recipients for which it proposes to undertake permissible activities.
Explanation. - The list shall contain the names of service recipients as on the date of application. Other service recipients may be added to the list from time to time (see clause 12(2))
5. Legal Form
The Applicant shall be required to be set-up in IFSC either in the form of a company or a branch of a company incorporated in India or outside India.
6. Owned Fund requirements
A Finance Company/Finance Unit undertaking the activity of GRCTC shall have and maintain a minimum owned fund of USD 0.2 million at all times.
Provided that in case of a Finance Unit undertaking the activity of GRCTC, the required owned fund may be maintained at the parent level.
7. Fit and Proper Requirement
