Family offices await clarity from RBI before firming up GIFT City plans [Read More]

The movement of Indian family offices to GIFT City is hindered by regulatory uncertainties, particularly concerning remittance of funds overseas. While regulations currently permit Family Investment Funds (FIFs) in GIFT City to transfer funds abroad via Overseas Direct Investment (ODI) and Overseas Portfolio Investment (OPI) routes, clarity from the Reserve Bank of India (RBI) is awaited. \r

Experts suggest the OPI route could become popular, allowing up to 50% of the entity's net worth to be transferred abroad. However, concerns persist about potential impacts on exchange rate management and forex reserves if substantial funds exit India. Regulatory ambiguity also complicates matters, with implications under FEMA laws for banks facilitating such transfers. \r

The RBI's vigilance underscores the need for stringent oversight amid aspirations to promote GIFT City as a financial hub.