IFSCA sets “financial soundness” norms for payment system operators in GIFT City

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Existing payment system operators must submit certificates from their statutory auditors confirming compliance with the prescribed criteria for the preceding financial year by September 30 each year

By Avinash Nair

Updated - October 28, 2026 at 09:29 AM.

The IFSCA has prescribed “financial soundness” criteria for payment system operators in GIFT IFSC. | Photo Credit: VIJAY SONEJI

The International Financial Services Centres Authority (IFSCA) has prescribed “financial soundness” criteria for payment system operators in GIFT IFSC, giving existing operators six months to comply and requiring new applicants to meet the norms while applying for authorisation.

Under the circular issued on October 27, Trade Receivables Discounting System (TReDS) operators must maintain a minimum net worth of $1 million (about ₹9.5 crore), while issuers of Legal Entity Identifiers (LEIs) must maintain a minimum net worth of $200,000 (about ₹1.9 crore). Trade Repositories must maintain net worth equivalent to at least one year’s operating costs, calculated on a half-yearly basis. Large-value payment systems and card payment networks must maintain a sound financial status, although the circular does not specify a fixed minimum net-worth requirement for these categories.

Explaining the rationale behind the norms, an IFSCA official told the businessLine that the Payment and Settlement Systems Act, 2007, requires the regulator to consider an applicant’s financial status, management experience and integrity while granting authorisation to operate a payment system. However, the term “financial status” is not defined in the Act or the associated laws, including the Reserve Bank of India Act and the Banking Regulation Act, 1949. IFSCA therefore decided to prescribe net-worth criteria for both existing operators and new applicants to provide greater regulatory clarity, the official said.

On the consequences of non-compliance, the official said IFSCA does not expect existing operators to fall short of the prescribed requirements. However, if an operator fails to comply, the regulator can take action under Chapter VII of the Payment and Settlement Systems Act, which deals with offences and penalties. The action would depend on the nature and extent of the failure and other relevant factors, the official said.

When asked if the new norms could make it harder for smaller fintech companies to enter GIFT IFSC, the official said the payment system categories covered by the circular largely comprise established players, such as Clearing Corporation of India Ltd (CCIL) in large-value payment systems and global card payment networks. For fintech companies and smaller payment infrastructure providers looking to offer cross-border payment services in GIFT IFSC, a separate framework is already in place under the IFSCA (Payment Services) Regulations, 2024. These regulations prescribe an initial net-worth requirement of $100,000 (about ₹95 lakh) for such services, the official said.

Under the new circular, existing payment system operators must submit certificates from their statutory auditors confirming compliance with the prescribed criteria for the preceding financial year by September 30 each year. Trade Repositories must also provide half-yearly computations of their financial position. New applicants must submit a statutory auditor’s certificate confirming compliance with the financial soundness criteria along with their application. The circular has come into immediate effect.

Published on October 28, 2026

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