Banks seek relief from sustainable lending norms at IFSCA
In short
Banks asked the International Financial Services Centres Authority for relief from sustainable lending targets for their international banking units. The request comes after Foreign Currency Non-Resident deposits at GIFT City rose sharply following the RBI swap facility introduced in June.
This matters because the rules may affect how banks manage those deposits and loans. The report says IFSCA may offer similar exemptions, but it does not say if any decision has been made.
What the reporting says
Banks have approached the International Financial Services Centres Authority over sustainable lending targets for international banking units, after a rise in Foreign Currency Non-Resident deposits at GIFT City. The deposit surge followed the Reserve Bank of India’s swap facility introduced in June, according to the report. It is not stated whether IFSCA will grant exemptions, only that similar relief has been given by the RBI before.
Why it matters
Banks have asked the International Financial Services Centres Authority to relax sustainable lending targets for international banking units after a surge in Foreign Currency Non-Resident deposits at GIFT City. The deposits rose following the RBI swap facility introduced in June. The issue matters for how banks deploy foreign-currency deposits, but the reporting does not say whether IFSCA has approved any exemption or what the final rule will be.