Federal Bank has received Reserve Bank’s nod to set up International Financial Services Centre (IFSC) Banking Unit (IBU) in Gujarat International Finance Tec-City (GIFT City).

Once the IBU is opened, the bank will be able to meet the funding needs of overseas entities other than individual/retail customers/HNIs, including the buyers of exporters from India, and undertake their transactions in currencies other than Indian rupee. The bank can also deal with the wholly-owned subsidiaries/JVs of Indian companies registered abroad.

It also permits the bank to accept borrowings in foreign currency with original maturity period greater than one year. Besides, through the IBU, the bank will be enabled to lend under external commercial borrowings to meet foreign currency requirement of the bank’s domestic clients. 

A bank with a strong NRI client base, Federal Bank accounts for nearly 9 per cent of the total NRI remittances to India. With the setting up of the IFSC unit in GIFT City, the bank will now be able to cater to the needs of NRI clients around the globe in terms of meeting their overseas funding requirements, a statement from the bank said.