The International Financial Services Centres Authority (IFSCA) has issued regulations to operationalise Global In‑House Centres (GIC) within the International Financial Services Centre (IFSC). The rules are intended to position IFSCs as centres for high‑value financial and related services, attract work currently performed in offshore centres, and create employment while strengthening India’s role in global financial value chains.
The notification defines a GIC Unit as an entity set up in the IFSC by a Financial Institution Group, either directly or via a third‑party service provider. Such units must register under the new regulations and may operate under a variety of models, including captive centre, build‑operate‑transfer, joint venture or hybrid arrangements. The regulations prohibit transferring existing contracts or work arrangements from entities in India to set up a GIC Unit in the IFSC.
Global In‑House Centres IFSC operating models and fit and proper norms
Under the new regime, GIC Units must ensure that their entities and key personnel are fit and proper at all times. The fit and proper criteria include financial integrity, good reputation and character, and honesty. The principal officer and compliance officer must be full‑time employees of the GIC Unit and resident in the IFSC. Directors, partners and controlling shareholders are also required to meet these standards.
Permissible services and client restrictions
The regulations specify that permissible services will relate to financial products and services provided to non‑resident entities of the Financial Institution Group. Importantly, services may only be provided to entities located in jurisdictions not identified by the Financial Action Task Force (FATF) as high‑risk or subject to calls for action. The Authority will consider requests from entities located outside India to move GIC services to the IFSC, subject to prior approval.
The rules are calibrated to prevent regulatory arbitrage and to ensure that the relocation of activity to the IFSC is genuine and adds value. By excluding entities in FATF high‑risk jurisdictions, the regulations aim to preserve the IFSC’s international reputation and compliance standards.
Currency, reporting and operational requirements
GIC Units will conduct operations in specified foreign currencies, and must maintain their balance sheets in one of those currencies. Units may open an Indian rupee account only to meet administrative and statutory expenses. Financial reporting is to be furnished to the Authority and, unless otherwise stated, will be required in US dollars.
The regulations also mandate ongoing reporting of operational information to the Authority, reinforcing oversight and transparency. These provisions are designed to provide a clear regulatory framework for multinational financial groups considering the IFSC as a location for centralised functions.
IFSCA’s move is likely to appeal to global financial institutions seeking a regulated, India‑based platform for service delivery. By formalising the legal and operational framework for GIC Units, regulators aim to repatriate work from offshore centres, foster job creation, and integrate the IFSC more deeply into global financial networks.
Key Takeaways:
- IFSCA has notified regulations to allow Global In‑House Centres (GIC) to operate from the International Financial Services Centre, aimed at drawing high‑value financial work back to India.
- GIC Units must meet fit and proper norms for officers and shareholders, with principal and compliance officers as full‑time employees based in the IFSC.
- Permissible services are restricted to non‑resident entities in jurisdictions not listed as FATF high‑risk; operations will be conducted in specified foreign currencies.
- The move is designed to strengthen India’s integration into global financial value chains and generate employment through the IFSC hub.
