Establishment
The IFSCA Act, 2019 (Act 50 of 2019) received the President's assent on 19 December 2019. IFSCA was established under it on 27 April 2020. Before then, business in the IFSC was regulated by the domestic regulators, RBI, SEBI, IRDAI and PFRDA, each for its own sector. IFSCA explains that it was set up as a unified regulator because business in an IFSC needs a high degree of coordination across the financial sector.
Section 12 of the Act makes it IFSCA's duty to develop and regulate financial products, financial services and financial institutions in the IFSCs. Its functions include:
- regulating the products, services and institutions that a regulator had permitted in an IFSC before the Act came into force;
- regulating any other products, services or institutions that the Central Government notifies; and
- recommending to the Central Government further products, services and institutions that could be permitted in an IFSC.
What 'unified' means
Section 13(1) provides that, in the IFSCs, the powers that each appropriate regulator holds under the Acts listed against it in the First Schedule are exercised by IFSCA, so far as they relate to the regulation of financial products, financial services and financial institutions. The First Schedule lists:
| Regulator | Acts listed |
|---|---|
| Reserve Bank of India | RBI Act, 1934; Banking Regulation Act, 1949; Deposit Insurance and Credit Guarantee Corporation Act, 1961; Foreign Exchange Management Act, 1999; Credit Information Companies (Regulation) Act, 2005; Government Securities Act, 2006; Payment and Settlement Systems Act, 2007 |
| SEBI | Securities Contracts (Regulation) Act, 1956; SEBI Act, 1992; Depositories Act, 1996 |
| IRDAI | Insurance Act, 1938; General Insurance Business (Nationalisation) Act, 1972; IRDA Act, 1999 |
| PFRDA | PFRDA Act, 2013 |
The procedural provisions of those Acts, on applications, inspection, investigation, adjudication, fees and penalties, apply to the IFSC with necessary changes (section 13(4)). Penalties, fines and fees are collected in the foreign currency equivalent (section 13(5)). In practice, one regulator now writes the rulebook, registers entities and supervises them. IFSCA's own regulations often cite both its Act and the sectoral Act; the payment systems regulations, for example, are made under the IFSCA Act and the Payment and Settlement Systems Act, 2007.
What IFSCA also does
- SEZ administrator. IFSCA acts as administrator under the SEZ framework for units in GIFT IFSC. Its SWIT workflow routes the SEZ application, the Letter of Approval and the bond-cum-legal undertaking through IFSCA. See SEZ unit approval.
- Single window. Applications for registration are filed on SWIT, IFSCA's single window IT system. See SWIT.
- Publication. IFSCA publishes its regulations, circulars, consultation papers, FAQs, enforcement orders and statistics on ifsca.gov.in.
- Informal guidance. IFSCA operates a scheme under which a department can give its view on how the rules apply to a specific proposal. See Informal guidance.
What IFSCA does not do
IFSCA does not grant tax benefits. Those come from the Income-tax Act, 2025 and CBDT notifications; see Section 147. It does not replace company-law registration with the Ministry of Corporate Affairs, or employment and other registrations with the State of Gujarat. Those steps sit alongside IFSCA registration.
The transfer of powers is also limited by its own terms. It covers regulation of financial products, services and institutions in the IFSC. Where an Indian resident deals with the IFSC, for example by remitting money to an IFSC fund or bank, the resident's side of the transaction is still governed by RBI's rules under FEMA. See Who regulates what.