International Financial Services Centres Authority (IFSCA) has issued a circular addressing financial institutions in IFSCs regarding the permissible transactions through Special Non-Resident Rupee (SNRR) accounts. Under the amended Foreign Exchange Management (Deposit) Regulations, 2016, notified on January 14, 2025, IFSC units are now allowed to use SNRR accounts for all business-related transactions. Previously, these accounts were restricted to specific transactions, such as administrative expenses in INR outside IFSC, proceeds from the sale of scrap, and government incentives in INR. This amendment broadens the scope of permissible transactions for IFSC units. The accounts can be opened with authorized dealers in India (outside IFSC) in line with this regulatory update.
International Financial Services Centres Authority
Circular No. F No. IFSCA-FMPP0BR/4/2024-Banking /1 Dated: January 29, 2025
To,
All Financial Institutions in IFSC
Madam/Sir
Permissible transactions through the Special Non-Resident Rupee (SNRR) accounts of IFSC units – Amendment
1. As you would be aware, a unit in an International Financial Services Centre (IFSC), notified under section 18 of the Special Economic Zones Act, 2005, may open an SNRR account with an authorised dealer in India (outside IFSC).
2. The extant 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.
3. All Financial Institutions may note that an amendment to the regulations, notified on January 14, 20251, now permits the said SNRR account to be used for all business related transactions of the IFSC unit.
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)
