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Central Bank of India is set to operationalise its IFSC Banking Unit (IBU) at GIFT City in Gandhinagar in the first week of next month after receiving approvals from the Reserve Bank of India and the International Financial Services Centres Authority. The move is aimed at expanding the bank’s international banking operations and increasing its foreign exchange business. The public sector lender plans to offer foreign currency loans, trade finance and treasury services through the new unit. The bank also said it is well prepared for the Expected Credit Loss (ECL) framework scheduled to come into effect from April 1, 2027, backed by additional provisions and stronger risk monitoring systems.
Central Bank of India is preparing to begin operations at its IFSC Banking Unit (IBU) in GIFT City, Gandhinagar, in the first week of next month as part of its plans to strengthen international banking operations and expand its foreign exchange business. Advertisement
The public sector lender has already received approvals from the Reserve Bank of India and the International Financial Services Centres Authority (IFSCA) for setting up the unit. Managing Director and CEO Kalyan Kumar said the bank has completed most of the groundwork and has already appointed a branch head for the upcoming office.
He stated that the bank expects the new unit to help generate a sizeable volume of forex business while also strengthening its international banking presence. According to him, the launch of the IBU would mark an important step in the bank’s expansion strategy and improve its ability to offer specialised banking services to corporate clients with overseas funding requirements.
The unit will provide access to international financial markets and enable the bank to offer products such as foreign currency loans, trade finance solutions, treasury services and risk management products. The bank also plans to provide enhanced banking solutions to clients dealing with international transactions and foreign currency exposure.
GIFT City has emerged as India’s key international financial services hub over the past few years, attracting banks and financial institutions looking to expand offshore banking operations. Several public and private sector banks have already established IBUs in the financial centre to cater to cross-border financing and trade-related business.
On the regulatory front, Kumar said the bank has been preparing for the Expected Credit Loss (ECL) framework, which is scheduled to be implemented from April 1, 2027. He indicated that the transition is not expected to create operational difficulties for the lender as preparations have been underway for several quarters.
The bank has already made additional provisions of INR 1,575 crore for stage 1 and stage 2 assets, while maintaining 100 per cent provisioning for stage 3 assets. Under the ECL framework, banks will be required to recognise credit losses earlier by estimating potential defaults, expected losses and exposure risks in advance.
The framework is expected to increase provisioning requirements across several loan segments compared to the existing norms. However, the bank said it has strengthened its credit underwriting standards and post-disbursement monitoring systems over the past few years to improve asset quality and risk management.
Kumar further stated that the bank is developing different stress-testing models to assess how its portfolio may behave under changing macroeconomic conditions. He added that the lender remains prepared for the migration to the ECL framework as part of its broader risk management strategy.
Source PTI
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