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OFFSHORE BANKING UNIT

 

An Offshore Banking Unit is a branch of a bank located in a Special Economic Zone which has obtained the permission under Section 23 (1) (a) of the Banking Regulation Act, 1949. Section 23 (1) (a) of the Banking Regulation Act, 1949, requires that no banking company shall open a new place of business in India or change otherwise than within the same city, town or village, the location of an existing place of business situated in India, without obtaining the prior permission of the Reserve Bank.

 

PROCEDURE FOR SETTING UP AN OFFSHORE BANKING UNIT

 

APPLICATION PROCEDURE:

 

A person intending to set up and operate an Offshore Banking Unit in a Special Economic Zone must make an application to the Reserve Bank in Form VI prescribed under the Banking Regulation (Companies) Rules, 1949 under Section 23 of the Banking Regulation Act, 1949.

 

PROCESSING OF THE APPLICATION:

 

The Reserve Bank, upon receiving the application, shall grant permission to the applicant for setting up and operating an Offshore Banking Unit, provided that the applicant fulfills all the terms and conditions specified and notified by the Reserve Bank.

 

 

INTERNATIONAL FINANCIAL SERVICES CENTRE

 

An International Financial Services Centre is one which has been approved by the Central Government to be set up in a Special Economic Zone. Its purpose is to facilitate business within a Special Economic Zone.

 

 

PROCEDURE FOR SETTING UP AN INTERNATIONAL FINANCIAL SERVICES CENTRE

 

 

APPROVAL BY THE CENTRAL GOVERNMENT:

 

An International Financial Services Centre can be set up only with the approval of the Central Government. The Central Government can approve only one International Financial Services Centre in a Special Economic Zone.

 

The Central Government may prescribe the requirements for setting up of Units in an International Financial Services Centre and also lay down certain terms and conditions for their operation. While prescribing such requirements, terms and conditions, the Central Government shall take into consideration such guidelines as may be framed by the following bodies: