IFSCA Allows IIOs to Raise Reinsurance Invoices in Contract Currency Including INR

Circular no. eF.No. 103/IFSCA/Ins/CIRC/1/2021; Dated: 27.11.2025

The International Financial Services Centres Authority (IFSCA) has released a clarification regarding the issuance of invoices by IFSC Insurance Offices (IIOs) engaged in reinsurance transactions. The move aims to remove ambiguity surrounding permissible invoicing practices and ensure compliance with currency regulations applicable in IFSCs.

1. Issuance of Invoice in Contract Currency

IFSCA has clarified that an IIO transacting reinsurance business may issue invoices to the following entities:

Indian insurers
Foreign insurers
Reinsurers

Such invoices may be raised in the currency of the underlying reinsurance contract, which may include:

Any foreign currency
Indian Rupees (INR)

This flexibility ensures that invoice issuance aligns with international reinsurance contracting practices.

2. Mandatory Realisation in Specified Foreign Currencies

While invoices may be raised in INR or foreign currency, IFSCA has mandated that the realisation of the invoice amount must take place only in the specified foreign currencies permitted for IFSC transactions.

Key requirement:

The payment must be credited to the IIO’s bank account maintained with any International Banking Unit (IBU).
Such credit must be received in the designated foreign currencies as prescribed under IFSC guidelines.

This ensures that foreign exchange management standards applicable to IFSC entities remain consistent, even when invoicing occurs in INR.

3. Objective and Impact of the Clarification

Aligns invoicing practices with international reinsurance market norms
Provides operational flexibility to IIOs
Ensures compliance with IFSC currency realisation requirements
Reduces ambiguity for Indian and foreign insurers engaged with IIOs
Strengthens ease of doing business within IFSC

4. Conclusion

IFSCA’s clarification brings greater clarity and uniformity to the invoicing and settlement practices of IFSC Insurance Offices. By allowing invoices in contract currency—including INR—while mandating foreign currency realisation, the Authority balances operational flexibility with regulatory prudence.