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The International Financial Services Centres Authority ("IFSCA") has notified the IFSCA (Global In-House Centres) Regulations, 2025 ("New Regulations"), thereby repealing and replacing the erstwhile IFSCA (Global In-House Centres) Regulations, 2020 ("Old Regulations"). The New Regulations mark a significant evolution in the regulatory framework governing Global In-House Centres ("GICs") in International Financial Services Centres ("IFSC"), reflecting IFSCA's broader policy objective of positioning IFSC as a globally competitive hub for high-value financial and related services.
All GIC Units registered under the Old Regulations are required to align with the New Regulations within 90 days from their commencement.
This alert sets out a detailed comparison of the Old and New Regulations and highlights the practical implications for GICs operating in or planning to set up operations in IFSC.
COMPARATIVE ANALYSIS
| Particulars | Old Regulations | New Regulations | Change |
| Definition of GIC and GIC Unit | GICs were broadly defined as units in IFSCs providing support services to group entities, without a conceptual distinction between GIC as a service and GIC as a unit / entity. | Distinguish between "GIC" as a service construct and "GIC Unit" as the regulated entity. | Provides more clarity in construction of the Regulations. |
| Applicant | GIC should be an entity of Financial Services Group (FSG) | GIC should be an entity of Financial Institution Group (FIG) or a thirdparty service provider. | Allows independent service providers not forming part of a group to also furnish GIC services. |
| Recipient of Services | Services to be provided by GIC to FSG. FSG included any entity regulated by a financial services regulator in its home jurisdiction including its holding, subsidiaries, associate companies, and branches / subsidiaries of its holding company. | Services to be provided by GIC to FIG, covering banks, NBFCs, insurers, brokers, exchanges, and similar institutions and their group entities connected via parent–subsidiary relationship, JVs, associates, common branding, ≥20% equity participation, network membership, or any other arrangements permitted by IFSCA. | The expanded FIG coverage allows for more diverse group structures and arrangements within the financial group framework, enhancing operational flexibility and strategic alignment. Further, the New Regulations has dispensed with the earlier requirement that the group entity must be regulated by a financial sector regulator in its home jurisdiction. |
| Permissible Business Models | GICs were permitted to provide services as Captive Centre. | The New Regulations permits to undertake activities through Captive Centre, BOT, JV, Hybrid, or other permitted models. | This enables group entities to access GIC services without being constrained to a single operational model, thereby lowering entry barriers and improving ease of doing business. |
| Eligibility – jurisdiction al risk (FATF) | Required servicing only group entities in FATF-compliant jurisdictions. | Adds explicit prohibitions for branch setups and promoters from FATF "High-Risk Jurisdiction subject to call for action" for eligibility for set-up. | Strengthens AML/CFT safeguards. |
| Legal Form | No explicit legal forms of entities were specified | Specifies permissible legal forms which include company or LLP incorporated in an IFSC, branch of a foreign company/LLP, or any other form allowed by IFSCA. | Enhances certainty and flexibility. |
| Application Process | The Single Window IT System (SWIT) did not exist. | Applications submitted via the Single Window IT System (SWIT); | Digitized filing and a formal cure period enhance transparency and predictability of registration timelines. |
| Grant of registration | Single-stage approval | A two-stage process consisting of inprinciple approval followed by final registration, subject to compliance with prescribed conditions within 180 days. | Introduces a staged approval process and strengthens supervisory oversight. |
| Currency of operations & accounts | Operations of GIC were permitted in freely convertible foreign currency, with INR accounts allowed for administrative expenses. Maintenance of books/records in declared foreign currency. | Operations of GIC unit must be conducted in Specified Foreign Currency (as per IFSCA Banking Regulations). INR accounts are permitted only for administrative and statutory purposes, and balance sheets must be maintained in a specified foreign currency. | Aligns currency framework with IFSCA Banking Regulations; balance sheet currency explicitly set. |
| Permissible services & client base | Services by GICs were limited to support services relating to financial products and permitted to be provided only to non-resident entities |
Allows GICs to provideservices relating to financial products and financial services to Indian group entities up to 10% of their total revenue in a financial year while continuing to emphasize servicing non-resident entities located in FATF compliant jurisdictions. However, non-India GIC serving India group entities may shift to IFSC with prior approval of IFSCA. |
Controlled flexibility to serve India group entities (≤10% revenue), potentially aiding integration and ramp-up. |
| Transfer of existing work from India | Not expressly covered | GIC units cannot be set up by transferring existing contracts/work from India entities. | This prevents cosmetic relocations and ensures genuine IFSC build-out. |
| Employee relocation | Relocation of supervisory personnel from India was capped at 20 percent, subject to approval. | Such explicit cap has been removed. | This improves talent mobility and reduces operational friction. |
| Fit & Proper Criteria | Not expressly prescribed | Detailed "fit & proper" criteria for unit, principal officer, compliance officer, directors/partners/desi gnated partners, and controlling shareholders have been outlined. | Significant governance enhancement; background checks and ongoing eligibility become central. |
| Principal & Compliance Officer | Not specifically mandated | Requirement of mandatory full-time Principal Officer and Compliance Officer, based in IFSC | Codifies accountability and local compliance capacity within IFSC. |
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
