The International Financial Services Centres Authority (IFSCA) has released an important circular on November 11, 2025, providing additional directions to all IFSC Banking Units (IBUs) regarding the reporting of transactions for India’s external account statistics. The directive, issued under file number IFSCA-FMPP0BR/13/2023-Banking, aims to enhance transparency and data accuracy in the reporting of foreign currency assets held by IBUs.
Background
Under IFSCA’s earlier circular dated September 19, 2022, IBUs were required to submit a fortnightly Banking Asset Liability (BAL) statement through the Foreign Exchange Transactions Electronic Reporting System (FETERS). This data, shared with the Reserve Bank of India (RBI), forms a key part of India’s Balance of Payments (BoP) and external sector statistics.
Until now, IBUs were primarily reporting:
- Foreign currency balances held in Nostro accounts abroad, and
- Other foreign currency investments, including fixed deposits, securities, loans, and treasury bills.
However, with the increasing scale of international operations in India’s International Financial Services Centres (IFSCs), several IBUs have begun maintaining foreign currency accounts for overseas banks — a segment that had not been captured in the existing reporting mechanism.
New Reporting Requirements
To address this gap, IFSCA has mandated additional reporting obligations for IBUs. Beginning the second fortnight of November 2025, all IBUs must report the balances in foreign currency accounts of overseas banks (Vostro accounts) in the BAL statement through the RBI’s BoP portal (https://bop.rbi.org.in/).
A revised reporting format has been provided as an Annexure to the circular. This format includes new fields specifically designed to capture balances held by overseas branches and correspondent banks under non-resident accounts.
Key Reporting Guidelines
The circular outlines the following instructions for accurate reporting under the new framework:
- Single Entry for Balance Type:
IBUs should report only the net credit (Ct) or net debit (Dt) balance for each foreign currency account. There must not be simultaneous entries for both. - Book Value Reporting:
Balances should be reported at book value in the respective currency of the overseas bank or correspondent. - Country and Currency Specification:
The “Country” field must indicate the home country of the overseas bank, while “Currency” refers to the currency in which the account is maintained.
These new data points are intended to give the RBI and IFSCA a more comprehensive view of foreign currency positions, helping strengthen India’s external sector analysis and risk monitoring capabilities.
Regulatory Authority and Compliance
IFSCA has emphasized that these new instructions are supplementary to the earlier circular and the RBI’s operational guidelines. The circular further warns that non-compliance or inaccurate reporting will be viewed seriously.
The directions are issued under the powers conferred by Section 35A of the Banking Regulation Act, 1949, and Section 13(1) of the International Financial Services Centres Authority Act, 2019.
Conclusion
This circular marks another step in IFSCA’s ongoing efforts to align IFSC operations with international best practices in financial reporting and transparency. By capturing Vostro account balances in the BAL statement, the regulator aims to provide a more holistic picture of India’s foreign currency ecosystem while ensuring that the rapidly growing IFSC framework operates with global standards of prudence and accountability.