The Business and Economy IFSCA informs global in-house centers regulations this Wednesday. The International Financial Services Centres Authority (IFSCA) had made a huge decision by facilitating the setting up and functioning of global in-house centers (GIC) in IFSCs.
All thanks to this move, now the multinational corporations can set up GICs, service delivery operators, or subsidiaries that are generally located in low-cost geographies. IFSC is established in GIFT city in Gujarat.
GICs set up in an IFSC are only allowed to serve non-resident entities. The supervisory personnel will be transferred from within India to work in the GIC in IFSC.
According to the notification, GICs will only be allowed to deal in freely convertible foreign currency aside from maintaining an account in Indian currency for its administrative expenses.
Again the notice said that “The subsidiaries can only work in branch mode to their parent firm, not from any other defined mode”.
Last month, the government notified banks, insurance firms, brokerages, and financial intermediaries to set up their subsidiaries there.
The criteria for becoming eligible for a GIC registration are: the organization shall have to exclusively cater to its financial services group, the organizations served must be located in Financial Action Task Force compliant authorities.
Furthermore, according to the notice, the support services provided to its financial services group must be to carry out a financial service in respect of a financial product.
A GIC under the IFSC is bound to submit all its reports to the officials in the form of US dollars unless they aren’t told to submit the report in another form.
The government addressed the GIFT city as a global financial hub. GIFT city was also compared to established global financial centers like London, Hong Kong, Dubai, and Singapore.