Clarification on usage of SNRR Accounts for IFSC units

IFSCA has amended the circular on permissible transactions through Special Non-Resident Rupee (SNRR) accounts to bring much-needed regulatory clarity and flexibility for IFSC units.

Previously, IFSC units faced restrictions on using SNRR accounts outside the IFSC for business-related transactions. Now, pursuant to this circular:

• IFSC units now have the flexibility to manage business-related expenses in INR outside IFSC, i.e., they may also receive funds in INR like government incentives or sales proceeds.
• Financial service-related transactions such as receipt of fees shall continue to stay within IFSC banking units.

This step simplifies operations for IFSC units and reinforces India’s growing role as a global financial hub. A welcome move to address industry needs!

Link to circular: https://lnkd.in/dpPx-SQ2

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Priya Kapasi Shah

Associate Partner | Tax & Regulatory | priya.k@server5.the-treelife.com

Heads Treelife’s Financial Advisory practice, specializing in investment structuring, cross-border transactions, and tax and regulatory advisory. Also leads on AIF setups and advisory services for GIFT IFSC.