Offshore Banking Units: Critical Analysis of The IBU Framework

Explore the critical analysis of Offshore Banking Units (OBUs) and the specialized International Financial Service Centre (IFSC) Banking Units in India. Understand their evolution, advantages, legal compliance, and the unique role of the Reserve Bank of India (RBI) in the regulatory framework.

With the banking structure expanding its arms from a thing of mere domestic happening to becoming an instrument of overseas trade, it has seen a fresh air of internationalization with the introduction of Offshore Banking Scheme, specially designed to prosper their global dealings seamlessly. An Offshore Banking Unit (OBU) is a type of financial institution that operates in a foreign country, usually in a low-tax or tax-free jurisdiction, and provides banking services to non-residents. OBUs are typically set up by commercial banks, but can also be established by other financial institutions such as insurance companies or investment firms.[1]

OBUs provide a range of banking services, including deposit-taking, lending, foreign exchange, and trade finance. They usually operate under different regulatory frameworks than domestic banks, which typically allows them to operate with greater flexibility and lower tax rates. This makes OBUs attractive to multinational corporations, wealthy individuals, and investors looking to diversify their assets and minimize their tax liabilities.

Evolution of OBUs: Unravelling the History

The history of offshore banking units (OBUs) can be traced back to the early 20th century Europe when wealthy individuals and businesses began to seek out international banking services to take advantage of tax havens and lower tax rates. But before that, it is said that OBUs were born during the Vienna Congress in 1815.[2] There are also claims that it originated in the Channel Islands of France. As the affluent people in Europe started to search for a safe haven for their riches, the concept of OBUs slowly developed. Post Napoleonic period was defined by economic turmoil. The rate of taxation was higher than necessary to finance wars and the government did not provide any security to the finances of the rich in return and hence, led to the affluent people to find a place to store their money safely.[3]

However, the modern concept of OBUs as we know them today emerged in the 1960s and 1970s. In 1960, the Bahamas became one of the first countries to establish itself as an offshore financial center, offering tax incentives and a favorable regulatory environment for international banks and financial institutions. Other countries soon followed suit, including Bermuda, the Cayman Islands, and Switzerland.[4]

During the 1970s, the oil crisis and the rise of petrodollars contributed to the growth of offshore banking. Large sums of money flowed into the global financial system, and international banks began to expand their operations to meet the demand for offshore banking services. The offshore banking industry continued to grow in the 1980s and 1990s, as globalization and advances in technology made it easier for individuals and businesses to conduct financial transactions across borders.[5]

The 2008 financial crisis and subsequent global economic downturn led to increased scrutiny of the offshore banking industry, with concerns raised about tax evasion, money laundering, and other forms of financial crime. As a result, many offshore financial centers have implemented stricter regulations and greater transparency requirements to improve their reputation and mitigate the risk of financial instability.

In the subsequent decades, however, with the recuperation from the economic crisis in the 2010s, the OBUs once again got an impetus with the introduction of newer financial centres in various countries including India, and acted as an important tool of global banking relationships.
These developments were, however, premised upon the various advantages that are bundled up with the OBUs in banking. A brief manifestation of the same is therefore done in the subsequent sections of this paper.

Advantages of Offshore Banking Unit

There are several potential benefits of establishing an overseas banking unit for a country, some of which are:

• Increased foreign investment: An overseas banking unit attracts foreign investment into India, as it provides a gateway for international companies to invest and access financial services in India. By establishing an overseas banking unit, domestic banks access international financial markets, enabling them to raise funds at lower costs and diversify their sources of funding.[6]
• Increased trade opportunities: Overseas banking units facilitates trade between domestic and other countries by providing financing, payment, and settlement services. This can lead to increased exports and imports and boost the overall economy.
• Improved competitiveness: An overseas banking unit can provide domestic banks with a competitive advantage by offering a wider range of financial products and services to customers, which can lead to increased customer satisfaction and loyalty.

Overall, establishing an overseas banking unit can be beneficial by increasing foreign investment, improving access to international financial markets, increasing trade opportunities, diversifying risks, and improving competitiveness.

Edge over Normal Commercial Banks

OBUs also have an edge over other normal banks. Some of the reasons are mentioned below.

• Limited access to foreign funds: Normal banks may face restrictions in accessing foreign funds, which can limit their ability to lend to customers and invest in the economy. By establishing an overseas banking unit, parent banks can access foreign funds and diversify their sources of funding.[7]
• Lack of international presence: Domestic banks may lack an international presence, which can limit their ability to attract foreign investment and support domestic businesses operating overseas. An overseas banking unit can help parent banks establish an international presence and provide support to its businesses operating in other countries.
• High dependence on the domestic market: Domestic banks may be highly dependent on the domestic market, which can increase their exposure to domestic risks and limit their ability to diversify risks. An overseas banking unit can help the parent banks to diversify their risks by expanding their operations overseas.

Offshore Banking Units in India: Understanding the Indian Scenario

The history of the Indian scenario of the Offshore Banking Unit goes back to the EXIM Policy of 2002-2007 wherein the idea of Offshore banking Units in SEZ was first put up with constant developments in that ever since.[8] Taking a clue of overseas banking units from other jurisdictions, the Reserve Bank of India, through the notification of Foreign Exchange Management (Offshore Banking Unit) Regulations, 2002, allowed the establishment of  OBU in the Special Economic Zones of India with special exemptions in taxations to it. As an explanation of the motive behind the regulation, a note appended to it expounded that the scheme of OBU has been put in place ‘to bring global competitiveness and creation of a seamless banking business environment.’[9]

For undertaking the OBU business, banks were required to get the permission of RBI under Section 23(1) of the Banking Regulation Act, 1949 with a stipulated amount of at least $10 Million for that OBU branch. The OBUs were restricted from undertaking any banking activity with the residents of India and were exclusively meant for overseas transactions with non-residents and other OBUs. Here, these OBUs were provided a sui generis status with special exemption from the application of any other rules or regulations issued by the RBI in respect of the Foreign Exchange regime. These OBUs were however restricted from being the Authorised Dealer in any foreign exchange transaction and were allowed to transact only in foreign exchange and not in the Indian currency, though were established within the Indian borders. With regard to the statutory requirements of SLR and CRR, OBUs are exempted from maintaining the requirements of CRR under Section 42(7) of the RBI Act, however, the OBUs are still required to maintain the SLR requirement prescribed under Section 53 of the Banking Regulation Act. A brief  manifestation of key characteristics of OBUs in India are:

> Minimum Capital Requirements: The minimum capital requirement for OBUs in India is 15% of risk-weighted assets, with Tier I capital of not less than 10% of risk-weighted assets.[10]

> Reporting: OBUs are required to submit regular reports to the RBI on their operations, including daily balance sheets, weekly statements of foreign currency assets and liabilities, and quarterly statements of their capital adequacy position.

> Audit Requirements: OBUs in India are required to undergo the following audits: statutory audit, compliance audit, concurrent audit, and internal audit in the manner prescribed by RBI.

How are legal compliance of OBUs different from other Commercial Banks in India?

The OBUs are specialised types of banking branches that have different legal compliance requirements than the rest of conventional commercial banks. The legal compliance requirements for commercial banks and OBUs in India are different in the following ways:

> Regulatory Framework: Commercial banks in India are regulated by the Reserve Bank of India (RBI) under the Banking Regulation Act, 1949, and other related acts and regulations. OBUs, on the other hand, are regulated by the RBI under the Foreign Exchange Management Act (FEMA), 1999, and the regulations framed thereunder. Further, Special Economic Zone Acts of various states define the legal compliances and obligations imposed on the OBUs.

> Capital Adequacy: The capital adequacy requirements for OBUs are higher than those for commercial banks. OBUs are required to maintain a minimum capital adequacy ratio (CAR) of 15% as against 9% for the rest of commercial banks.

> Lending Restrictions: OBUs are not permitted to lend to residents of India, including Indian companies and individuals. They can only lend to non-residents or foreign companies. Commercial banks, on the other hand, can lend to both residents and non-residents.

> Reserve Requirements: Commercial banks are required to maintain cash reserves (CRR) with the RBI, which is calculated as a percentage of their deposits. OBUs are exempt from maintaining cash reserves with the RBI.[11]

> Deposit Insurance: While the deposits in Commercial banks are insured upto an extent of Rs. 5 Lakhs from Deposit Credit Guarantee Corporation of India, the same are not insured in the OBUs.[12]

In summary, the legal compliance requirements for commercial banks and OBUs in India differ in terms of regulatory framework, capital adequacy, lending restrictions, reserve requirements, and taxation. OBUs are subject to stricter regulations and higher capital requirements due to their focus on serving foreign clients.

International Financial Service Centre Banking Unit (IBU): A special OBU

IBU stands for International Banking Unit, which is a branch of a foreign bank operating in India. The IBU is a specialized OBU unit that is set up in a specific area of the country to carry out offshore banking activities and provide various financial services to customers. IBUs were brought forth in the Indian legal regime through the International Financial Services Centre Act 2019. The IBUs are set up in accordance with the guidelines issued by the Reserve Bank of India (RBI) and the International Financial Service Centre Authority (IFSCA) and are regulated by both RBI and IFSCA.

The IBUs are typically located the International Financial Services Centres (IFSCs) in India. Some of the major IFSCs in India include the Gujarat International Finance Tec-City (GIFT City) and the International Financial Services Centre at the Bandra Kurla Complex (IFSC-BKC) in Mumbai.

Now that India has established its own IFSC, there are also several benefits associated with setting up an IBU. There are several relaxations with respect to Companies Act, 2013 which include flexibility to choose the same financial year as the parent company, holding an EGM in any place within or outside India, and also no compulsory rotation of statutory auditor is required. Similarly, it is also not required to comply with several mandates of RBI.[13] There are also several concessions like Income Tax Holiday, Concessional Tax Rate, MAT Concessions, and no DDT. Several benefits are also given to the investors which include the interest income to non-residents is not taxable and the bonds listed at IFSC exchange are also taxable at a lower rate of 4%.[14]

One of the important features of this category of bank is that they are largely governed by the laws prescribed by IFSCA with minimal interference of RBI into it. They offer various banking and financial services, including corporate banking, trade finance, treasury operations, investment banking, and wealth management subject to the rules and regulations prescribed by the IFSCA. In the later parts of this article, a brief research has also been made to the role and status of RBI in the IFSC Banking Units.

How are OBUs different from IFSC Banking Units?

An important characteristic of the Indian banking structure is the presence of both OBUs and IBUs working side by side. OBUs are specialized branches of the banks located in the Special Economic Zones that cater to the overseas banking requirements of non-residents, the IFSC Banking Units on the other hand are specialized Universal banking units located in the IFSC area of a Special Economic Zone that not only cater to the overseas banking activities, but also deal in a variety of other activities like insurance with easy regulation by a super regulator. A bank opts for IFSC Banking Unit owing to the following advantages that are associated with IBUs over and above the OBUs:

i. Wider scope of operations: IFSCs offer a broader range of financial services, including banking, insurance, and capital market activities, whereas OBUs are limited to offshore banking activities such as accepting deposits, extending loans, and undertaking foreign exchange transactions.

ii. Tax incentives: IFSCs offer a special tax regime with lower tax rates and various tax incentives for businesses operating within the IFSCs, which can reduce the overall tax burden for IBUs. OBUs, on the other hand, are subject to the same tax laws and regulations as domestic banks. The IFSC more or less are free from stamp duty implications, which is one of the fundamental advantages associated with them over the OBUs.

iii. Infrastructure and connectivity: IFSCs are designed to provide world-class infrastructure and connectivity to global financial markets, which can help IBUs access a wider range of clients and counterparties. OBUs, on the other hand, are typically located in special economic zones (SEZs) or export processing zones, which may have limited connectivity to global financial markets.

iv. Regulatory framework: IFSC IBU are regulated by a dedicated regulator, the International Financial Services Centres Authority (IFSCA), which is focused on promoting the development of the IFSCs and ensuring the safety and soundness of the financial system within the IFSCs. OBUs, on the other hand, are regulated by the Reserve Bank of India (RBI), which is responsible for regulating the banking system in India as a whole.

A brief summarisation of the regulatory requirements of the IFSC banking Units is summarised hereunder in the picture given below.

With such relaxations even from SLR and CRR, IFSC banking Units enjoy a streamlined offshore performance with less regulatory hurdles. Overall, IFSCs offer a more comprehensive set of financial services and a business-friendly environment for foreign investors to conduct their offshore activities. The tax incentives, infrastructure, and regulatory framework provided by IFSCs can make it an attractive destination for businesses looking to set up offshore banking units in India.

The Performance of IFSC Banking Units in India

An important facet of the IFSC Banking unit pertains to their performance in the Indian banking sector. Since IFSC banking units (IBUs) were only introduced in India in 2015, their performance has been relatively limited, but it has shown steady growth over the years.

According to the Reserve Bank of India (RBI), the total assets of IFSC banking units increased from INR 36.67 billion (USD 491 million) in March 2017 to INR 212.36 billion (USD 2.84 billion) in December 2020. This had risen to a new high of 14 billion plus by May 2021.[15] This indicates a five-fold increase in assets over a period of four years.

In terms of business activities, IBUs have been primarily engaged in foreign currency lending and borrowing, trade finance, and servicing offshore clients. IBUs have been successful in attracting foreign banks, institutional investors, and global corporations to set up their offshore banking operations in India.

Furthermore, the Government of India has undertaken several measures to promote the growth of IFSCs and IBUs in the country. These include tax incentives, relaxed regulations, and infrastructure development, all of which have created a more conducive environment for businesses to operate in IFSCs.

In terms of profitability, IFSC banking units in India have reported mixed results. Some units have reported profits, while others have reported losses. This is partly due to the fact that IFSC banking units are still in the early stages of development and are facing challenges in terms of infrastructure and regulatory issues.

Overall, the performance of IFSC banking units in India has been positive, with steady growth in assets and an increasing number of foreign banks and businesses setting up their offshore operations in IFSCs. These developments have so far, however, been with regard to the GIFT City and not the IFSC Bandra Kurla Complex. How far the development of IBU goes in IFSC, both in GIFT City and the BKC area is something that the time will tell. The government and regulatory authorities need to work together to address the challenges faced by IFSC banking units and create a more conducive environment for their growth and development.

Role of RBI in IBU: The Silhouetted Region

The strings of dichotomy lie in the culling out of the role of RBI in the IBU drive. While IFSCA is the primary regulator that has ceased RBI of its vital overseeing powers, the RBI is till powerful in some extent. An effort has been made in order to understand the role of RBI in IFSC Banking Units in India in the subsequent paragraphs.

• RBI- A Super- Super Regulator

A Super Regulator refers to a ‘mega’ regulator that combines the regulatory functions two or more supervisory bodies relating to the banking, insurance, securities, among others.[16] The International Financial Services Centres Authority (IFSCA) is the prime regulator of IBU that combines not only the functions of RBI, but also of the SEBI, IRDAI and PFRDA.[17] With such super-regulatory approach, the IFSCA has been provided with stemmed arms for the unified regulation of IBUs in IFSC areas. However, an interesting situation arise with regard to the role of RBI that it still is powerful in some regards giving it a special stature.

♦ Quasi-Regulatory Functions: The RBI regulates OBUs to ensure that they comply with the regulations governing their operations and prevent any financial misconduct or fraud. It grants permission to Indian banks to set up OBUs in foreign countries. The bank has to fulfil certain conditions before obtaining permission from the RBI.[18] The RBI also periodically inspects OBUs to ensure that they are functioning within the regulatory framework. It also mandates that OBUs maintain adequate capital to absorb any losses that may arise from their operations. The RBI sets limits on the amount of exposure that an OBU can have with any single borrower or group of borrowers.

♦  Prudential Functions: The RBI sets prudential norms for OBUs in areas such as asset classification, provisioning, and capital adequacy. These norms ensure that OBUs maintain high standards of financial prudence. OBUs are required to submit periodic reports to the RBI on their operations, including their balance sheets, income statements, and other relevant financial information. It uses these reports to monitor the activities of OBUs and assess their compliance with the regulatory framework. It plays a crucial role in regulating OBUs of Indian banks by granting permission, monitoring activities, setting prudential norms, mandating capital adequacy, and ensuring compliance with reporting requirements. This ensures that OBUs maintain high standards of financial prudence and operate within the regulatory framework.

♦  Enforcement Agency: The RBI has the power to take enforcement action against financial institutions that violate the regulatory framework. It can impose penalties, suspend or cancel licenses, and take other remedial measures as necessary.

♦  Coordinative Agency: The RBI works closely with the International Financial Services Centres Authority (IFSCA) to coordinate the regulatory framework applicable to the IFSC. The RBI provides inputs and recommendations to the IFSCA on matters related to the financial sector.

With such roles being played by RBI, it assumes a critical place in the IFSC by regulating and supervising the financial institutions operating in the IFSC along with the close cooperation and supervision of IFSCA. Its regulatory and operational functions are designed to promote financial stability, protect the interests of investors, and foster the growth of the financial sector in India. While IFSCA is free to regulate the IBUs, much of its freeness is subject to the regulations and supervision of RBI. In such a case, the RBI plays a role of a ‘Super-Super Regulator,’ one that regulates and supervises even a super regulator.

• RBI, The Helpless Crier: Powerplay between RBI and IFSCA

Though the RBI can be considered a “Super-Super Regulator” of IFSC Banking Units, however, a recent tussle between RBI and IFSCA cast aspersions on these notions. A brief instance of the same is hereby provided.

♦  Regulatory Arbitrage by IFSCA: RBI has recently raised concerns about the IFSCA’s regulatory framework for IBUs. The RBI has argued that the IFSCA’s regulations could lead to regulatory arbitrage, which is a practice where financial institutions take advantage of regulatory differences between jurisdictions to reduce their regulatory burden and increase their profits. The RBI is concerned that the IFSCA’s regulatory framework for IBUs could lead to a situation where IBUs take advantage of loopholes in the regulations to engage in risky or fraudulent activities.[19]

♦  Heaven for Round-Tripping: The RBI has also expressed concerns about the potential for IBUs to be used for round-tripping of funds. Round-tripping is a practice where funds are transferred from India to a tax haven and then back again to take advantage of tax laws. The RBI is concerned that IBUs could be used to facilitate round-tripping of funds, which could undermine the stability of the Indian financial system.[20]

The IFSCA has, however, defended its regulatory framework for IBUs, arguing that it is necessary to attract international financial services to the IFSC and that it is consistent with global best practices. The IFSCA has also emphasized the importance of ensuring that IBUs are subject to strong regulatory oversight to maintain the integrity of the IFSC as a financial center.

The tussle between the RBI and IFSCA highlights the helpless plight of RBI in controlling the arms of IFSCA and being a sole crier. In such a case, it would be loose and unjust to call  it as a “Super-Super Regulator of IFSC Banking Units of India.”

Legal Issues with IFSC IBU: Understanding the Grey Areas

The IFSC Banking Units though have been duly regulated by the IFSCA with slight complementary support from the RBI, the regulations yet face a lot of issues in terms of their inter-jurisdiction transactions and the multiple regulators attached to it. A brief summary of the key issues associated with the IFSC IBU are as follows:

• International Branch with National Dispute Resolution:

 An irony lies in the fact that though the IFSC Bank branches are considered as the international branches of the parent banks, the dispute resolution scheme for such banks is still not clear. In such a case, presently, the disputes or legal issues that arise from IFSC IBUs are subjected to the dispute resolution of the Indian territory. This goes completely inconsistent with the Special Economic Zones Act that provides that an SEZ area shall be deemed to be outside the custom territory of India. This dichotomy is therefore an irony of nationalization masquerade as internationalization.[21]

• Compliance with foreign laws:

IFSC banking units operate in a jurisdiction where they are subject to Indian laws as well as the laws of the country where their clients are based. Compliance with foreign laws can be complex and challenging, as there may be differences in the legal systems and regulatory requirements of different countries.

• Taxation:

One of the major benefits of operating in an IFSC is the tax incentives provided by the government. However, there are legal issues surrounding the taxation of income generated by IFSC banking units. There are also issues related to the taxation of transactions conducted by IFSC banking units, particularly cross-border transactions.

• Anti-money laundering and counter-terrorist financing:

IFSC banking units are required to comply with anti-money laundering (AML) and counter-terrorist financing (CTF) regulations. These regulations are designed to prevent financial institutions from being used for illicit activities such as money laundering and terrorism financing. Compliance with AML/CTF regulations can be complex and challenging, and non-compliance can result in significant penalties and reputational damage.

• Data protection and privacy:

IFSC banking units handle sensitive financial and personal information of their clients, which requires compliance with data protection and privacy regulations. In addition, there are legal issues related to the transfer of data across borders, particularly to countries with different data protection and privacy regulations.

• Intellectual property:

IFSC banking units may engage in activities that involve the creation, acquisition, protection, and licensing of intellectual property. This can include trademarks, patents, copyrights, and trade secrets. Compliance with intellectual property laws can be complex, particularly when operating in multiple jurisdictions.

• Internal control:

Auditors must ensure that the IFSC banking units have implemented adequate internal control policies and procedures to ensure the reliability of financial reporting and compliance with regulatory requirements

Conclusion

The International Financial Services Centre at the GIFT City would make India stand strong in the global stage. For the same, a series of policy changes have been done including the International Finance Services Centres Authority Act, 2019. A separate legislative body has been envisaged in the same which will essentially act as Single regulator. Though the OBUs were allowed in the Special Economic Zones only , the need for IBUs or IFSC Banking Units arose with India’s progress as one of the fastest growing economy of the world. The freedom provided in terms of regulations is to ensure that IFSC is at par with other financial centres of the world. However, one of the major problems with the IFSC Banking Units lie with he role of RBI in the same. Though it has some super-super regulatory powers to play, it however cries helpless because of its loosening power against IFSCA. Not only this, but there are several other legal issues that have been already pointed out in this paper but the fact remains development of the Overseas Banking Units is related with the development of the IFSC. The regulatory framework for IFSCs is being constantly reviewed and updated to meet international standards and ensure that the financial activities within the IFSC are conducted in a safe, sound, and efficient manner. This will give confidence to international financial institutions and investors to set up operations in India.

 India is a large and growing market, with a growing middle class and increasing disposable income. The presence of financial institutions in IFSCs will enable them to tap into this growing market and provide financial products and services to Indian consumers. The ongoing trade tensions and uncertainty surrounding the geopolitical environment have led to a shift in the global financial landscape, with India emerging as a potential destination for international financial services providers to diversify their operations. Hence, IFSC is going to emerge as one forum the most important financial centres as it has all the potential. What remains to be seen is whether the potential can be exploited to the most and be used as a ‘regulatory sandbox’ for applying the similar provisions to the rest of the country in this drive for internationalising the banking ecosystem.

[1] Jason Gordan, ‘Offshore Banking Unit- Explained,’ (The Business Professor, 18 April 2022) available at https://thebusinessprofessor.com/en_US/banking-lending-credit-industry/offshore-banking-unit-definition accessed 3 March 2023.

[2]Santana Nyekano, ‘History of Offshore Banking: Does it really have a future.’ (Worldoffshorebanks) available at https://www.worldoffshorebanks.com/history-of-offshore-banking-does-it-really-have-a-future.php#:~:text=Offshore%20banking%2C%20is%20a%20segment,the%20Channel%20Islands%20of%20France.

[3] Ibid.

[4] Carlene Francis, ‘The Offshore Banking Sector In The Bahamas’ (1985) 34(4)  Social and Economic Studies, 91, 110

[5] Sanatana (n 2).

[6] SK Verghese ,‘Off – shore Banking Centres in India : Problems and Prospect,’ (1982) 17 (13) Economic and Political Weekly 34

[7] Ibid.

[8] Sahib Singh, ‘Third Five-Year EXIM Policy (2002-2007)- A Free Trade Regime,’ (IIFT) available at https://www.iift.ac.in/iifthindi/docs/exim_ss.pdf accessed 6 March 2023

[9] ‘Scheme for Setting up of Offshore Banking Units in Special Economic Zones,’ (RBI, 12 November 2002)  available at https://www.rbi.org.in/scripts/NotificationUser.aspx?Id=943&Mode=0 accessed 6 March 2023 (hereinafter Scheme of OBU)

[10] Master Circular on “Offshore Banking Units (OBUs) – Facilities for Residents”, RBI, July 1, 2015

[11] Scheme of OBU, Para 2.4.1

[12] Scheme of OBU, Para 2.13

[13] Atulya Sharma, ‘Gift City in Gujurat and Incentives to Financial Sector’, (Lumiere Law Partners, 26 Jan 2022) available at https://lumierelp.com/articles/gift-city-in-gujarat-and-incentives-to-financial-sector/ accessed 7 March 2023.

[14] Suchitra Karthikeyan, ‘GIFT City: The history and Tax Incentives of India’s first Smart City’ The Hindu  (New Delhi, 29 August 2022)

[15]  ‘IFSC Banking,’ (Giftsez, May 2021) available at https://giftsez.com/documents/PPT-Banking-Opportunities-in-IFSC-May2021.pdf accessed 8 March 2023.

[16] Janak Raj, ‘Is There a Case for a Super Regulator in India? Issues and Options,’ (2005) 40(35) Economic and Political Weekly3846-3855

^[17] Anish Jaipuriar, Ashutosh Nagar, et al. , ‘India: International Financial Services Centres Authority: All About The Gift City Regulator (Part II),’ (Mondaq, 12 March 2021) available at https://www.mondaq.com/india/financial-services/1046280/international-financial-services-centres-authority-all-about-the-gift-city-regulator-part-ii accessed 8 March 2023

[18] Scheme of OBU (n 9).

[19] ‘RBI and IFSCA clash over regulatory arbitrage in IFSC Banking Units,’ (Economic Times, 19 July 2021) available at https://economictimes.indiatimes.com/industry/banking/finance/banking/rbi-and-ifsca-clash-over-regulatory-arbitrage-in-ifsc-banking-units/articleshow/84546415.cms accessed 9 March 2023.

[20] Ibid.

[21] Paridhi Adani, Ankoosh Mehta, et. Al, ‘IFSC Banking Units-Offshore branches with onshore dispute resolution?’ (Cyril Amarchand Mangaldas Blogs, 14 December 2021) available at https://corporate.cyrilamarchandblogs.com/2021/12/ifsc-banking-units-offshore-branches-with-onshore-dispute-resolution/ accessed 10 March 2023.

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Authors: Parv Pancholi (4th Year student at National Law University Odisha), and Debjani Panda (4th Year student at National Law University Odisha)