The International Financial Services Centres Authority (“IFSCA”), in exercise of powers conferred under Section 12 and Section 13 of the International Financial Services Centres Authority Act, 2019 and Regulation 18 of the IFSCA (Registration of Insurance Business) Regulations, 2021, vide Circular No. eF.No. 103/IFSCA/Ins/CIRC/1/2021,[1] dated November 27, 2025, has issued a clarification to address operational challenges faced by IFSC Insurance Offices (“IIOs”) relating to the currency of invoicing in reinsurance transactions routed through IFSC Banking Units (“IBUs”).
Previously, IIOs had represented to IFSCA that they faced operational constraints when required to issue invoices strictly in the currency of the underlying reinsurance contract while settlement occurred through IBUs.
Key Clarification
In light of the above, IFSCA has clarified the following:
- Flexibility to Raise Invoices in Contract Currency (Including INR): An IIO may raise invoices on Indian insurers, foreign insurers, reinsurers, or cedants in the currency of the underlying reinsurance contract, and such currency may include INR.
- Realisation to Continue Only in “Specified Foreign Currencies”: Despite flexibility in invoicing, realization of amounts into the IIO’s bank account maintained with an IBU must be in specified foreign currencies.
- Definition of “Specified Foreign Currency”: These are the currencies listed in the First Schedule of the IFSCA (Banking) Regulations, 2020, as amended from time to time.
Implications for IFSC Insurance Offices
- IIOs can now issue invoices in INR where the underlying contract permits, simplifying accounting and customer communication.
- Actual receipt of funds, however, must continue to comply with IFSCA banking norms requiring settlement in designated foreign currencies.
- This clarification eases operational processes while maintaining regulatory consistency within IFSC’s foreign-currency settlement framework.
[1]https://ifsca.gov.in/CommonDirect/GetFileView?id=38fea9cc5969551d78bf00e67015ce11&fileName=2025_11_27_Circular___Clarification_INR_invoice_20251128_0217.pdf