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IFSCA KYC and KRA Guidelines: Building Trust in GIFT City's Financial Ecosystem

FinTech
7 min read
Written by
Nidhi Nerli
Published on
November 16, 2025
‍Introduction

The International Financial Services Centres Authority (IFSCA) has emerged as a key regulator driving India's ambition to make GIFT City, Gujarat (Gujarat International Finance Tec-City), a global financial hub. It was established in April 2020 under the International Financial Services Centres Authority Act, 2019. The authority absorbed responsibilities formerly divided among the RBI, SEBI, IRDAI and PFRDA to create a streamlined, world-class regulatory environment. It promotes ease of doing business and innovation in the IFSC.

GIFT City is gaining traction among banks, fintechs, insurers, brokers, and asset managers. This makes understanding IFSCA's KYC and KRA guidelines critical for institutions planning to operate in this international financial centre.

Why KYC Matters in GIFT City

In a financial hub designed for cross-border banking, trading, and investment, customer trust and regulatory compliance are non-negotiable. KYC norms help:

  • Prevent money laundering and terrorist financing
  • Streamline digital onboarding in Gift ecosystem
  • Establish the true identity of clients, including NRIs, global corporations, and institutional investors
  • Enhance investor confidence in IFSC Gift City as a safe and transparent destination for investment
‍IFSCA KYC Guidelines

IFSCA issued the Anti-Money Laundering (AML), Combating Financing of Terrorism (CFT), and KYC Guidelines in 2022, aligning closely with FATF standards. These guidelines cover:

1. Risk-Based Customer Due Diligence (CDD)

Entities must adopt a risk-based approach. High-risk categories such as politically exposed persons (PEPs) or investors from sensitive jurisdictions require enhanced due diligence.

2. Digital Onboarding and Video KYC

IFSCA permits:

  • Use of e-KYC and Officially Valid Documents (OVDs)
  • Video-based Customer Identification Process (V-CIP), for Indian nationals
  • Recent pilot of V-CIP to Non-Resident Indians (NRIs) from 11 regions, enabling seamless remote onboarding.
3. Central KYC Records Registry (CKYCR) Integration

Entities operating in IFSC Gift City must utilise the KYC Identifier (KIN) issued by the CKYCR. This reduces duplicate documentation and speeds up client onboarding.

4. Record Keeping and Reporting

Institutions must maintain client records, transaction logs, and audit trails as per IFSCA norms, ensuring readiness for inspections and audits.

KYC Process Flow in GIFT City

The KYC process in GIFT City follows a streamlined yet comprehensive approach designed to accommodate both domestic and international clients:

Proposed IFSCA KRA Guidelines (2025)

In line with India's domestic SEBI KRA framework, IFSCA has released draft regulations for setting up KYC Registration Agencies (KRAs) in IFSC. These KRAs will serve as central repositories of KYC data.

Key Highlights:
  • Mandatory Uploads: Regulated entities must upload verified KYC data to a KRA within three working days
  • Centralised Access: Other intermediaries in GIFT City can rely on KRA-validated data instead of duplicating verification
  • Governance: KRAs will need to maintain audit trails, cybersecurity safeguards, and periodic compliance reporting
  • Global Benchmarking: The framework is aligned with international standards, making IFSC Gift City globally competitive
  • Legal Form: Only a separate legal entity may register as a KRA; must be a wholly-owned subsidiary of a recognised stock exchange, depository, or existing KRA (India or overseas).
  • Net-worth floor: USD1 million to be maintained at all times.
  • Officers: Mandatory Principal Officer (≥10 yrs finance experience) and Compliance Officer (≥5 yrs) with specified postgraduate/professional qualifications.
  • Independent Validation: The KRA must independently validate every KYC file it receives before other intermediaries can rely on it. 
  • Interoperability: Electronic connectivity with other IFSC KRAs and SEBI-registered domestic KRAs.
GIFT City KYC vs Other KYC Frameworks: Key Differentiators
Comparison with Domestic Indian KYC
Future Outlook

With IFSCA's progressive stance, the future of KYC and KRAs in GIFT City looks transformative:

  • Expansion of Video KYC to foreign nationals
  • Full operationalisation of IFSC-specific KRAs by 2026
  • Integration of AI-driven fraud detection and RegTech solutions
  • Strengthening of data privacy laws for cross-border investors in GIFT City, India
  • Mutual recognition agreements with other international financial centres
Fast-track your client onboarding with Elefint!

Elefint offers comprehensive expertise in developing IFSCA-compliant solutions. These solutions transform regulatory requirements into competitive advantages.

Our Digital KYC platform specifically addresses regulatory requirements. It optimises customer onboarding experiences, enabling financial institutions to achieve full compliance within timelines.

Our innovative technology solutions can streamline your IFSCA KYC compliance journey. We aim at enhancing operational efficiency and customer satisfaction across your organisation. Contact Elefint today!

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Nidhi Nerli
CTO, Elefint