IFSCA Directs IBUs to Comply With Banking Laws Amendment Act, 2025

Circular e-File. No. IFSCA-FMPP0BR/35/2025-Banking, Dated 12.12.2025

1. Background

The International Financial Services Centres Authority (IFSCA) has issued a circular drawing the attention of International Banking Units (IBUs) to a notification issued by the Department of Financial Services (DFS). The notification appoints November 1, 2025 as the date for commencement of certain provisions of the Banking Laws (Amendment) Act, 2025.

The circular emphasises that IBUs operating in IFSCs must ensure full compliance with the newly enforced statutory provisions from the notified date.

2. Provisions Coming Into Force

The DFS notification brings into effect the following sections of the Banking Laws (Amendment) Act, 2025:

Section 10
Section 11
Section 12
Section 13

These provisions amend aspects of the Banking Regulation Act, 1949 and related banking laws, impacting governance, regulatory oversight, and operational requirements applicable to banking entities.

3. Applicability to International Banking Units

IFSCA has clarified that:

The enforcement of the above provisions is equally applicable to IBUs
IBUs must review the amended provisions and align their policies, procedures, and governance frameworks accordingly
Any operational, compliance, or reporting changes arising from the amendments must be implemented on or before November 1, 2025

4. Legal Authority for the Directions

The circular has been issued under the powers conferred by:

The IFSCA Act, 2019, read with
The Banking Regulation Act, 1949

This confirms IFSCA’s supervisory jurisdiction over IBUs in respect of compliance with central banking legislation as amended from time to time.

5. Regulatory Intent

The directive aims to:

Ensure regulatory uniformity between domestic banking entities and IBUs
Facilitate smooth implementation of the Banking Laws (Amendment) Act, 2025
Strengthen prudential governance and statutory compliance within IFSC banking operations
Avoid transitional gaps or non-compliance due to delayed adoption of amended provisions

6. Compliance Takeaways for IBUs

International Banking Units should:

Conduct a gap analysis of existing practices vis-à-vis sections 10–13 of the amended Act
Update internal policies, SOPs, and governance documents
Train compliance and operations teams on the new requirements
Ensure readiness for IFSCA supervisory review post-implementation

Failure to comply may attract regulatory observations, directions, or enforcement action under the applicable IFSC regulatory framework.