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. According to reports from The Economic Times, the public sector lender has received regulatory approvals from the Reserve Bank of India and the International Financial Services Centres Authority (IFSCA) to establish the IBU. The bank has already posted a branch head and groundwork is in progress at the location. As per PTI, MD and CEO Kalyan Kumar confirmed the bank would be in a position to open its IBU branch by the first week of next month, emphasising the bank's commitment to mobilising a good amount of forex business through this initiative.
The IBU will provide the bank access to international financial markets and allow it to deliver a complete range of products to its corporate clients with foreign currency funding requirements. The bank will offer a comprehensive suite of services, including foreign currency loans, trade finance solutions, treasury and risk management products, and enhanced convenient banking solutions to its customers. As reported by The Economic Times, Kumar emphasised that this opening will be a significant milestone in the bank's growth story and help expand international banking business. The bank's strategic focus on forex business mobilisation through this GIFT City branch demonstrates its commitment to international banking operations.
According to The Economic Times, Kumar confirmed that the bank has been preparing for the Expected Credit Loss (ECL) guidelines which kick in from April 1, 2027. The bank has made additional provision of ₹1,575 crore for stage 1 and stage 2 assets and maintains 100 per cent provision for stage 3 assets. Kumar stated there is no challenge in migrating to the ECL framework as the bank has been working on this transition for several quarters. As per PTI, Kumar highlighted that the bank has been working since several quarters and has made additional provision of ₹1,575 crore for stage 1 and stage 2 assets, with 100 per cent provision for stage 3 assets, ensuring smooth transition to the new framework.
As reported by The Economic Times, Kumar highlighted that the bank has brought significant improvements in credit underwriting quality and post-disbursement credit monitoring quality. The ECL framework requires banks to estimate losses using probability of default, loss given default and exposure at default, enabling earlier recognition of credit deterioration and more proactive risk management. The framework sets slightly higher minimum provisioning requirements than current norms, resulting in increased provisions across most product segments. Kumar further explained to PTI that the bank is developing different models through which it can conduct stress testing to see how its portfolio behaves in this dynamic process, preparing for the migration to ECL framework.
