IDBI Bank received license on October 13, 2015 from RBI for setting up an IBU at GIFT City Gandhinagar. Further, Kandla Special Economic Zone (KASEZ) as the administrator of the International Financial Services Center [IFSC], GIFT City, also accorded approval on September 4, 2015 for setting up IBU in the GIFT SEZ. GIFT-IBU commenced operations from May 6, 2016.

The International Financial Services Centers Authority (IFSCA) was established on April 27, 2020 under the International Financial Services Centers Authority Act, 2019, with its headquarter at GIFT City, Gandhinagar in Gujarat. IFSCA is the unified authority for the development and regulation of financial products, financial services and financial institutions in the GIFT IFSC w.e.f. January 1, 2021. IDBI IBU reports to the said authority and regularly submits its monthly and quarterly regulatory returns and reports to the authority. Apart from enjoying the status of a foreign jurisdiction under FEMA, the IFSC Banking Units (IBUs) enjoy special dispensation under several other domestic laws, including Companies Act, Direct Tax, Indirect Tax, making it competitive with other international financial centers.