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Financial Services Authorisation

Module Application

  • Does an organisation carrying on or seeking to carry on regulated banking or standalone primary dealer activities in India obtain and maintain the required RBI licences, authorisations and related approvals applicable to its activities?
  • Does an organisation carrying on regulated financial services activities in India assess whether registration as a non-banking financial company is required, obtain the appropriate RBI certificate of registration or category status, and continuously satisfy applicable continuing eligibility conditions?
  • Does an organisation carrying on payment system, prepaid payment instrument, payment aggregator, bill payment, trade receivables discounting or foreign exchange money-changing activities in India obtain and maintain the required RBI authorisations, approvals and participation statuses?
  • Does an organisation carrying on regulated financial services activities in India obtain and maintain the required SEBI registrations, recognitions and approvals for each securities market infrastructure, intermediary, fund, listed investment vehicle or foreign investor activity it carries on?
  • Does an organisation carrying on regulated financial services activities in India obtain and maintain the relevant IRDAI registration for each insurer, reinsurance or insurance intermediary activity it carries on?
  • Does an organisation carrying on regulated financial services activities in India obtain and maintain all PFRDA registrations, certificates, appointments and authorisation statuses required for its pension-sector activities?
  • Does an organisation carrying on or proposing to carry on regulated financial services or related activities in GIFT City IFSC obtain and maintain the applicable IFSCA registration, recognition, licence or authorisation and comply with the conditions supporting that status?

Module Scope

The India - Financial Services Authorisation module addresses the legal and regulatory framework governing entry into, maintenance of and exit from regulated financial services activities in India, including activities carried on in GIFT City International Financial Services Centre (GIFT City IFSC). It helps organisations identify the regulatory status required for their activities and understand the continuing conditions that may affect their ability to remain authorised.

Regulatory Coverage

India's financial services authorisation framework is administered through sector-specific regimes. Depending on its activities and legal form, an organisation may require a licence, registration, recognition, certificate, approval or other authorised status from the RBI, SEBI, IRDAI, PFRDA or IFSCA. The precise requirements differ by activity and regulatory category and are not treated as applying universally to every organisation.

The module covers initial authorisation and category status as well as the conditions that directly support continuing authorised status. These include capital and financial resources, ownership and change in control, regulated places of business, mergers and transfers of business, licence maintenance and cessation, and special legal forms and perimeter restrictions.

For GIFT City IFSC, the module addresses the IFSCA regulatory lifecycle from determining whether an activity requires approval and obtaining the applicable authorisation through maintaining governance and fitness, financial resources, permitted activities, client protection, operational resilience, reporting and regulatory cooperation requirements, and managing an orderly surrender or cessation.

What the module helps organisations do

The India - Financial Services Authorisation module provides information to organisations about how to comply with legal responsibilities when dealing with the following:

  • Identifying whether banking, NBFC, payment, foreign exchange, securities, insurance, pension or GIFT City IFSC activities require regulatory authorisation
  • Obtaining and maintaining the appropriate licence, registration, recognition, approval or category status before undertaking regulated activities
  • Maintaining applicable capital, net worth, net owned fund, solvency, prudential and other continuing financial eligibility requirements
  • Managing ownership, shareholding, voting rights, foreign investment and changes in control that may require prior regulatory approval
  • Managing regulatory requirements for branches, places of business and overseas presence
  • Assessing the authorisation consequences of mergers, reorganisations and transfers of regulated business
  • Managing renewals, variations, surrender, cessation and other authorisation lifecycle events
  • Identifying special legal-form and regulatory-perimeter requirements, including restrictions concerning unregulated deposit and prohibited prize or money circulation schemes
  • Maintaining the IFSCA approval and associated governance, conduct, operational, reporting and cooperation requirements applicable to activities in GIFT City IFSC

Applicability

The module applies to organisations carrying on, or proposing to carry on, activities that fall within a regulated financial services perimeter in India. The requirements applying to a particular organisation depend on its activities, legal form, regulatory category, ownership structure and location, including whether activities are undertaken in GIFT City IFSC.

The India - Financial Services Authorisation module should be subscribed to by any organisation that:

  • Carries on or proposes to carry on banking, standalone primary dealer, NBFC, payment or foreign exchange activities requiring RBI authorisation or registration
  • Operates or proposes to operate as a securities market infrastructure institution, intermediary, investment vehicle or regulated foreign investor within the SEBI framework
  • Carries on or proposes to carry on insurance, reinsurance or insurance intermediary activities regulated by IRDAI
  • Carries on or proposes to carry on pension-sector activities regulated by PFRDA
  • Carries on or proposes to carry on regulated financial services or related activities in GIFT City IFSC under the IFSCA framework
  • Requires guidance on how capital, ownership, business-location, restructuring or lifecycle changes may affect an existing financial services authorisation
  • Uses a specially regulated legal form or business model, or needs to assess whether an activity falls outside a permitted financial services regulatory perimeter

Consequences of non-compliance

Carrying on regulated financial services without the required authorisation, or failing to maintain conditions attached to an approval, may result in regulatory investigation, directions, restrictions on new or existing business, monetary penalties, suspension, withdrawal or cancellation of the relevant regulatory status and requirements to cease or transfer regulated activities.

Depending on the applicable framework and seriousness of the contravention, consequences may also include refusal or non-renewal of registration, restrictions on dealing with assets, winding-up or other compulsory action and liability for responsible officers. Certain unauthorised financial activities may attract criminal penalties. For GIFT City IFSC activities, IFSCA may also impose supervisory or enforcement measures affecting the organisation's ability to continue the relevant regulated activity.

Closing

The India - Financial Services Authorisation module provides organisations with a structured framework for understanding which authorisations apply to their financial services activities and the conditions that support those authorisations throughout their lifecycle. By bringing together sector-specific authorisation, continuing eligibility, ownership, structural change, business-location and cessation requirements, including the IFSCA framework for GIFT City IFSC, the module supports organisations in maintaining a clear and current view of their authority to conduct regulated business.