Chennai-headquartered public sector lender Indian Overseas Bank (IOB) has received approval from the International Financial Services Centres Authority (IFSCA) to establish an IFSC Banking Unit (IBU) as a branch at GIFT City in Gujarat.
The approval marks IOB’s entry into India’s premier international financial services hub and is expected to strengthen its capabilities in serving global banking and financial services requirements.
Perpetual licence granted
According to the approval granted by IFSCA, the licence will remain valid on a perpetual basis, subject to terms and conditions specified by the regulator from time to time.
The development follows the Reserve Bank of India’s approval in December 2025, which allowed IOB to set up an IFSC Banking Unit at GIFT City.
GIFT City emerges as global financial hub
The approval comes as GIFT City continues to expand its position as a global financial and business centre.
Banking assets within the GIFT City ecosystem have crossed $110 billion, while capital commitments under fund management activities have exceeded $32 billion.
The growth of the financial hub was recently reviewed by Union Finance Minister Nirmala Sitharaman during a high-level meeting in Gandhinagar focused on the progress of GIFT City and its international financial services ecosystem.
More than 1,150 entities operate from GIFT City
GIFT City currently hosts over 1,150 entities spanning financial services, technology and related sectors.
The ecosystem includes 37 banking units, 217 fund management entities, 36 insurance companies, 35 aircraft leasing firms and 36 ship leasing entities. It also houses international exchanges, fintech companies and international universities.
With its proposed banking unit, IOB will join a growing list of domestic and international financial institutions leveraging GIFT City’s regulatory and business framework to expand global operations.
Strong earnings momentum
The regulatory approval comes at a time when IOB is reporting robust financial performance.
The bank posted a 43.2% year-on-year increase in net profit to ₹1,505 crore during the March quarter of FY26, compared with ₹1,051 crore in the corresponding quarter of the previous year.
Net Interest Income (NII) rose 11.1% year-on-year to ₹3,470 crore, supported by steady business growth, lower credit costs and continued improvement in asset quality.
Expanding international footprint
The proposed IFSC Banking Unit is expected to enhance IOB’s international banking capabilities and provide access to opportunities within the growing global financial ecosystem at GIFT City.
The move aligns with the bank’s efforts to strengthen its presence in international financial services while supporting cross-border banking, trade finance and global investment activities.