The International Financial Services Centres Authority has mandated specific net-worth requirements for payment operators in GIFT City. TReDS platforms must maintain $1 million, while LEI issuers require $200,000. Existing entities have a six-month window to comply with these rules designed to increase financial oversight.
The International Financial Services Centres Authority (IFSCA) has introduced new, formal net-worth requirements for entities operating within the GIFT International Financial Services Centre. This change aims to bring clear, measurable standards to the financial integrity of payment system operators, moving away from previously broad regulations. The new guidelines establish specific fiscal thresholds to ensure these operators have the financial strength to manage risks effectively.
Under the new circular, Trade Receivables Discounting System (TReDS) operators must maintain a minimum net worth of $1 million. For entities involved in issuing Legal Entity Identifiers (LEI), the requirement is set at $200,000. Trade repositories are also subject to a dynamic requirement, with their minimum capital linked to their annual operating expenses, to be reviewed every six months. This shift replaces the vague concept of financial fitness with exact figures, providing greater clarity for current operators and new companies planning to enter the market.
Existing operators have been granted a six-month grace period to adjust their balance sheets and meet these standards. Following this, the regulator has introduced an annual compliance routine: companies must submit a statutory auditor certificate by September 30 of each year to confirm they continue to meet these net-worth levels. Failure to comply can lead to penalties under the Payment and Settlement Systems Act, which governs these financial institutions.
While these requirements set a higher bar, the IFSCA has clarified that the focus is primarily on large infrastructure providers, such as the Clearing Corporation of India Ltd and global card networks. Smaller entities providing cross-border payment services are handled differently; they continue to be governed by the existing IFSCA (Payment Services) Regulations, 2024, which maintain a lower barrier to entry with a $100,000 net-worth requirement. By distinguishing between core infrastructure and smaller service providers, the regulator aims to maintain high stability standards for critical systems while keeping the GIFT City ecosystem accessible for smaller firms.