𝐈𝐅𝐒𝐂𝐀 𝐈𝐬𝐬𝐮𝐞𝐬 𝐂𝐢𝐫𝐜𝐮𝐥𝐚𝐫 𝐨𝐧 𝐈𝐧𝐭𝐞𝐫𝐧𝐞𝐭 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 𝐟𝐨𝐫 𝐜𝐥𝐢𝐞𝐧𝐭𝐬 𝐨𝐟 𝐈𝐁𝐔𝐬

Recently the International Financial Services Centres Authority (IFSCA) has issued a circular directing all IFSC Banking Units (IBUs) to have in place Internet banking services for their clients, including the necessary guidelines and directives for setting up the same.

The circular mandates the IBUs to provide minimum of the following services:

(a) Information Service i.e providing information regarding the products and services available including details such as interest rates, terms & conditions, and other pertinent information, which must be consistently updated.

(b) Interactive information exchange service i.e Offering internet banking functionalities that empower clients to engage with the IBU, make account inquiries, etc.

(c) Transactional Service i.e. providing transactional service to allow clients to execute transactions such as the transfer of funds, payment of bills and executing other financial transactions.

The IBUs are further directed to (i) offer internet banking services exclusively to their clients, (ii) Ensure that the platform used for internet banking services is secure, user-centric, provides a seamless digital experience, and is accessible to clients throughout the day with minimal downtime, (iii) Incorporate compliance with risk management and security measures such as the establishment of a policy for internet banking services which aligns with the parent bank’s Information Technology and Information Security Policy, and adherence to ‘Know Your Customer’ requirements, (iv) Implementation of sound internal control systems, and (v) Providing adequate disclosure of risks, responsibilities, and liabilities to customers before offering the facility.

An IBU is defined under Regulation 2(1)(ec) of the IFSCA (Banking) Regulations as a Banking Unit licensed or permitted by IFSCA to operate in an IFSC as a branch of the Parent Bank.

The circular has directed the IBUs to submit an implementation plan to the IFSCA within 45 days from date of issue of the circular and establish internet banking services within six months from the date of this circular. Further that delay in implementation may attract restrictions on the operations of the IBU.

A copy of the IFSCA circular is attached herewith.

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