The International Financial Services Centres Authority (IFSCA) has amended its January 29, 2025, circular on permissible transactions through Special Non-Resident Rupee (SNRR) accounts of IFSC units. The revised guidelines clarify that SNRR accounts can be used for business-related transactions outside IFSC, including administrative expenses, sale proceeds of scrap, and government incentives. Additionally, an amendment to the Foreign Exchange Management (Deposit) Regulations, 2016, notified on January 14, 2025, allows IFSC units under the Special Economic Zones Act, 2005, to open SNRR accounts with authorized dealers outside IFSC for such transactions. However, financial service-related monetary transactions must still be conducted through accounts maintained with Banking Units in IFSC. These changes are issued under the IFSCA Act, 2019, to regulate and develop financial institutions and services in IFSCs.
International Financial Services Centres Authority
Circular No. F. No. IFSCA – FMPP0BR/4/2024-Banking /1 Dated: February 18, 2025
To,
All Financial Institutions in the International Financial Services Centre (IFSC)
Madam/Sir
Subject: Amendment to the Circular dated January 29, 2025 titled as “Permissible transactions through the Special Non-Resident Rupee (SNRR) accounts of IFSC units – Amendment”
1. Reference may be drawn to the Circular dated January 29, 2025, bearing File No. F No. IFSCA-FMPP0BR/4/2024-Banking /1 titled “Permissible transactions through the Special Non-Resident Rupee (SNRR) accounts of IFSC units – Amendment” (hereinafter referred to as “Circular”).
2. It is hereby decided to make the following amendments to the Circular:
a. Clause 2 of the Circular shall be substituted by the following, namely: –
“The erstwhile directions under the Foreign Exchange Management (Deposit) Regulations, 2016 (“the regulations”) permitted the abovementioned SNRR account to be used for business related transactions like administrative expenses in INR outside IFSC, INR amount from sale of scrap, government incentives in INR, etc.”
b. Clause 3 of the Circular shall be substituted by the following, namely: – 1
“3. All Financial Institutions may note that an amendment to the regulations, notified on January 14, 20251, now permits a unit in an IFSC under section 18 of the Special Economic Zones Act, 2005 to open an SNRR account with an authorised dealer in India (outside IFSC) for its business related transactions outside IFSC. In this regard, it is clarified that all units in an IFSC shall ensure transacting or receiving the monetary consideration relating to delivery of a financial service (i.e. funds/fees/amount) only through an account maintained with a Banking Unit in IFSC.
4. This circular is issued in exercise of powers conferred by Sections 12 and 13 of the International Financial Services Centres Authority Act, 2019 to develop and regulate the financial products, financial services and financial institutions in the International Financial Services Centres.”
Yours faithfully
(Supriyo Bhattacharjee)
Chief General Manager
Department of Banking Regulation
Notes:
1 Foreign Exchange Management (Deposit) (Fifth Amendment) Regulations, 2025 dated January 14, 2025, issued by the Reserve Bank of India (Notification No. FEMA 5(R)(5)/2025-RB)
