The International Financial Services Centres Authority (IFSCA) on December 08, 2025, issued the amendments to Module no. 16 (Providing Credit) of the IFSCA Banking Handbook: COB directions v6.0.
The following has been stated namely: -
• The circular modifies credit-related directions applicable to IFSC Banking Units (IBUs), effective immediately. It clarifies that restrictions under Section 20(1) of the Banking Regulation Act, 1949, will not apply to IBUs of foreign banks, though such lending shall still comply with updated regulatory conditions.
• New norms require IBUs to establish a clear policy for granting loans to directors or related parties, ensure decisions are free of conflicts of interest, and maintain terms comparable to similar third-party loans.
• Additionally, IBUs shall prevent involved persons from participating in loan approvals, adhere to exposure limits set by home regulators, undergo periodic audits, and notify the regulator within 15 working days.
• The amendment also now allows IBUs to lend for company share buy-backs only if permitted under the laws of the company’s jurisdiction.
[Notification no. - 110/IFSCA/Banking Regulation/2020-21]
