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GIFT City Yuan Proposal: Banks Seek CNH for IBUs

6 November 20251 min read
BANKING & FINANCEGIFT City YuanProposal: BanksSeek CNH for IBUs6 November 2025safalsetu.com

Why in the news

With India-China ties easing, the government and IFSCA are re-examining a plan for GIFT City banks to transact in the offshore yuan. It is under high-level review.

Key facts

  • Units: International Banking Units (IBUs) at GIFT City; regulator IFSCA.
  • Banks suggested CNH in October 2025.
  • IBUs now handle 15 currencies, spot and derivative products.
  • CNY is the onshore yuan; CNH is the offshore yuan used in cross-border trade.

Rationale

  • China is a big trade partner; CNH is increasingly used for settlements.
  • Wider products, financial diplomacy, a multipolar system with less dollar dependence, deeper offshore liquidity.

Earlier steps

  • 2024: IFSCA recommended five freely floating currencies including CNH.
  • Government accepted SEK, DKK, NOK, NZD, but excluded CNH over diplomatic sensitivities.

Exam angle

  • GIFT City regulator: IFSCA; CNH is offshore, CNY onshore.

Test yourself

1. In the GIFT City proposal, what does CNH stand for?

CNH is the offshore renminbi; CNY is the onshore one.

2. Which of these currencies did the government approve for GIFT City IBUs in 2024?

SEK, DKK, NOK and NZD were approved; CNH was excluded.

3. Which body is revisiting the CNH proposal for International Banking Units along with the government?

IFSCA regulates GIFT City and is reviewing the proposal.

This topic is part of Daily Current Affairs 5 November 2025 (15 topics).

All topics of the dayDay quizNovember 2025

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