IFSCA was notified as a single regulator to govern the growth and regulation of financial products, services, and institutions in the International Financial Services Centre (IFSC) in GIFT City, Gandhinagar. Prior to IFSCA, several domestic regulators such as the RBI, SEBI, IRDAI, and PFRDA governed entities in the IFSC. But the necessity to have an efficient and harmonized regulatory framework to promote growth and business facilitation resulted in the establishment of IFSCA. Know Your Customer, or KYC, is a core process in the financial sector, where institutions are mandated to confirm the identity and address of customers. It is essential for the prevention of financial fraud, money laundering, and terrorist financing. Standardized KYC processes not only provide assurance of compliance with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) rules but also improve the security and integrity of the financial system.

KYC Registration Agency (KRA) Regulations, 2025 were issued by the International Financial Services Centres Authority (IFSCA) to govern the activities of KRAs in IFSCs. They assure uniform Know Your Customer procedures and ensure transparency, accountability and availability of real time data. It will enhance system standardization and enhanced supervision by the regulators.

Legal Structure

The organizations ready to register as KRA shall establish:

  1. Company.
  2. 100% subsidiary of a stock exchange regulated in India, in the IFSC or in a Foreign Jurisdiction
  3. 100% subsidiary of a depository regulated in India, in the IFSC or in a Foreign Jurisdiction
  4. 100% subsidiary or branch of an entity engaged in activities of a similar nature as a KRA and regulated by SEBI or regulated in a Foreign Jurisdiction

Key Requirements for KRA setup

  1. Appointment of a Principal Officer and a Compliance Officer who shall have the minimum educational qualifications as required by regulations.
  2. Registered entity (KRA), Principal Officer, Key Managerial Persons and Shareholders will be required to comply with fit and proper requirements as specified in the regulation.
  3. Maintain Net Worth of USD 1 Million at all times.
  4. Maintains acceptable financial creditworthiness.
  5. Maintains necessary infrastructure such as office space, manpower, etc.

Process flow for Establishment in GIFT IFSC

Functions and Responsibilities of KRAs

Category Responsibilities
Core Responsibilities
  • Store KYC documents electronically for at least five years.
  • Maintain data security, backup systems, and business continuity plans.
  • Ensure interoperability with other KRAs and regulated entities.
  • Maintain and audit internal systems and controls regularly.
Reporting Obligations
  • Inform IFSCA of any significant changes in management or structure within 15 days.
  • Submit regular reports as notified by the Authority.
  • Maintain full audit trails of all uploads/modifications.
Obligations of Regulated Entities
  • Collect, verify, and upload KYC information to KRA systems within 3 working days.
  • Do not use KYC data for unauthorized commercial purposes.
  • Retain physical copies of KYC documents and ensure data accuracy.

Additional Requirements for KRA

  1. The entity shall comply with the code of conduct.
  2. Keep books of accounts for at least 8 years.
  3. Intimation to the authority in case of material change in the information already furnished to the authority.
  4. Shall have suitable policy for redressal of grievances of customers and keep proper records of grievances.
  5. The entity shall have its accounts audited every year and furnish the report to IFSCA within 30th September of the following year.

Regulatory Fees

  1. IFSCA Fees

-To be notified by IFSCA

  1. SEZ Fees
Particulars Amount (in INR)
Application Fees (one-time)  5,000
Registration fees (one-time) 25,000
Recurring fees (Annual) 5,000

Conclusion

Being registered KRA places an organization at the vanguard of digital trust and financial transparency as well as meeting regulatory mandates. It enhances the ability to manage risk better, provides real-time, verified customer information, and facilitates easier collaboration between financial institutions. The KRA model in GIFT IFSC is a forward-looking business edge for firms willing to invest in good governance, infrastructure, and compliance.

Authored by:
Kunj Solanki | GIFT City

FAQ