MUMBAI, May 2 -- The International Financial Services Centres Authority (IFSCA) has asked funds in GIFT City to hold off on action after a Reserve Bank of India (RBI) FAQ triggered confusion over their regulatory status.

In a circular issued on Friday, the GIFT City regulator said the RBI clarification is being discussed with the central bank and directed financial institutions in the jurisdiction to await further instructions from IFSCA.

The uncertainty stems from a 25 March RBI FAQ stating that entities operating in the GIFT International Financial Services Centre (IFSC) must file annual Foreign Liabilities and Assets (FLA) returns if they receive foreign investment or hold overseas assets. It also said subsidiaries set up in the IFSC...