Govt urges banks to deepen presence in IIBX, expand GIFT City operations

The finance ministry has advised both private and public sector banks to tap emerging business opportunities in the International Financial Services Centre (IFSC) ecosystem, particularly through the International Bullion Exchange (IIBX) at GIFT City, according to a senior government official.

 

“The move aims to deepen financial integration and expand the range of services Indian banks can offer to global clients. As part of the initiative, banks have been asked to facilitate dollar remittances from domestic tariff area (DTA) units to IIBX. And also, actively source clients such as qualified jewellers (QJ) and tariff rate quota (TRQ) holders for their international banking units (IBUs) operating as trading-cum-clearing members (TCMs),” the source added.

 

The senior government official further noted that the intent is to strengthen the ecosystem around IIBX and ensure that banks play a larger role in facilitating bullion trade and related financial flows.

 

Secretary of the Department of Financial Services (DFS) in the finance ministry M. Nagaraju on Tuesday chaired a meeting on the matter. Present were senior officials from the Department of Economic Affairs (DEA), Department of Revenue (DoR), Reserve Bank of India (RBI), Indian Banking Association (IBA), International Financial Services Centres Authority (IFSCA), the IIBX, and leading public and private sector banks.

 

“During the meeting, banks have also been encouraged to open dollar accounts for qualified suppliers (QS) within their GIFT IBUs to support trading and settlement operations. Further, Indian banks’ overseas branches — including those located in Dubai International Financial Centre (DIFC), Singapore, and Hong Kong — have been permitted to source QS accounts and manage their foreign exchange flows,” added the source.

 

The source further said that the move will also create investment avenues for non-resident Indians (NRIs), persons of Indian origin (PIOs), overseas citizens of India (OCIs), foreign investors, and IFSC-based entities, including funds set up in GIFT City.

 

“Investment in bullion depository receipts (BDRs) can be offered to overseas NRI clients and wealth management customers,” the official added.

 

“Exporters, too, stand to benefit from the changes. They will now be allowed to open foreign currency accounts (FCAs) with their IBUs to receive export proceeds or advance payments for goods and services. The funds in such accounts can be retained for up to three months and used to make payments to IIBX for the import of gold or silver,” added the source.

 

The sources said these measures are part of a broader effort to strengthen the role of Indian banks in global financial markets by leveraging the regulatory flexibility and operational advantages offered by GIFT City.

 

“The idea is to position Indian banks as active players in cross-border trade and investment flows, not just as intermediaries,” officials added.