IFSCA Guidelines for issuance of Certificate of Deposits

Last updated: 21 July 2021

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The International Financial Services Centres Authority (IFSCA) has issued new guidelines for the issuance of Certificates of Deposit (CDs) by IFSC Banking Units (IBUs). CDs are negotiable instruments issued for a specified deposit period, available in foreign currency with a minimum denomination of USD 2500. They can be issued to residents and non-residents, with maturity periods between 7 days and one year. IBUs can issue CDs at a discount or with fixed/floating rates and are permitted to buy them back after 7 days.

International Financial Services Centres Authority F.No.110/IFSCA/Banking Regulation/2021-22/5 July 20, 2021 To All IFSC Banking Units (IBUs / BUs) Dear Sir/Madam, Subject: Guidelines for issuance of Certificate of Deposits Certificate of Deposit (CD) is a negotiable instrument and issued in dematerialised form or as a Usance Promissory Note against funds deposited at a BU for a specified time period. 2. IBUs may issue CDs denominated in any freely convertible foreign curren

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FAQ :

A Certificate of Deposit (CD) is a negotiable instrument issued in dematerialised form or as a Usance Promissory Note against funds deposited for a specified time period.

The minimum amount for a CD should be USD 2500 or its equivalent in any freely convertible foreign currency.

The maturity period for CDs issued by IBUs must be no less than 7 days and no more than one year from the date of issue.

Yes, IBUs are permitted to buy back CDs before maturity, but only 7 days after the date of issue.

No, IBUs must clearly inform subscribers that the CDs issued by them are not covered by Deposit Insurance, and the lender of last resort (LOLR) facility is not available in IFSC.

No, IBUs shall not grant loans against CDs.

Notification No : F.No.110/IFSCA/Banking Regulation/2021-22/5
Source : https://ifsca.gov.in/Viewer/Index/201

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