International Financial Services Centre – Norms unveiled
- Only domestic banks and foreign banks having a presence in India will be allowed to set up units in IFSCs. They will need capital of US $20 million.
- Initially, banking units will not be permitted to service individual clients.
- Priority Sector Lending, Cash Reserve Ratio/ Statutory Liquidity Ratio requirements will not apply.
- No cash transactions will be permitted.
- Only non-rupee denomination transactions in IFSCs.
- Any recognized Indian stock exchange or any stock exchange of a Foreign Jurisdiction may form a subsidiary to provide the services of a stock exchange in IFSC, where at least 51% of paid-up equity share capital is held by such exchange and remaining shares may be offered to any other recognized stock exchange, whether Indian or of foreign jurisdiction.
- Resident Indians are allowed to trade in contracts offered in IFSC to the extent of the liberalized remittance scheme.
- Shareholding norms and Profit-Withholding norms have been relaxed for stock exchanges and clearing corporations.
- Resident Indians, eligible under the Foreign Exchange Management Act to invest funds offshore, to the extent allowed in the liberalized remittance scheme of RBI, in order to avail Investment advisory or portfolio management services in IFSC, should have a net worth of at least US $1 million during the preceding fiscal year.
- All Indian insurers can apply to set up an IFSC insurance office in the Special Economic Zone (SEZ).
- Foreign Insurance and Re-insurance companies should have a minimum capital of `10 crore.
- Will accept Re-insurance businesses from outside the country within the SEZ.