The International Financial Services Centres Authority (IFSCA) has released a draft IFSC
Depositor Education and Awareness Fund (DEAF) Scheme, 2026 to establish a formal
mechanism for managing unclaimed deposits held by banking units operating in GIFT IFSC.
The proposal is intended to strengthen depositor protection while supporting the rapid
growth of the banking ecosystem in GIFT City.
Background
Banking activity in GIFT IFSC has expanded significantly in recent years, with customer
deposits reaching US$8.98 billion as of March 2026. As the number of customers and
deposit products increases, the likelihood of dormant or forgotten accounts also rises. To
address this, IFSCA has proposed a dedicated framework similar to the system followed by
banks in the domestic Indian banking sector.
Key Proposals
1. Creation of a Depositor Education and Awareness Fund (DEAF)
∙A dedicated fund will be established to receive and manage unclaimed deposits.
∙The fund will also be used to promote depositor education and financial awareness
within the IFSC ecosystem.
2. Transfer of Unclaimed Deposits
∙Deposits and other eligible amounts that remain unclaimed for 10 years or more will
be transferred by IFSC Banking Units (IBUs) to the DEAF.
∙This aligns the GIFT IFSC framework with existing domestic banking regulations.
3. Protection of Depositors
∙Even after funds are transferred to the DEAF, depositors or their legal heirs will
continue to have the right to claim their money.
∙The framework specifies a reimbursement mechanism through which eligible claims
will be settled.
4. Governance Structure
∙A committee will be constituted to administer the fund.
∙The committee will:
oManage and invest the fund corpus.
oApprove expenditures.
oEnsure sufficient liquidity is maintained to honor depositor claims.
oReport income and expenditure details to IFSCA for determining interest
payable on claims.
5. Administrative Expenses
∙The operating and administrative expenses of the committee will be paid from the
fund itself.
∙However, expenditures must not compromise the fund's ability to reimburse
depositors.
Why This Matters
The proposed framework is an important step in strengthening confidence in the GIFT IFSC
banking ecosystem. It:
∙Protects customer interests by ensuring unclaimed deposits remain recoverable.
∙Introduces a transparent governance mechanism for managing dormant funds.
∙Brings GIFT IFSC banking practices closer to internationally accepted and domestic
regulatory standards.
∙Supports the long-term credibility and stability of GIFT IFSC as a global financial
centre.
Conclusion
The draft IFSC Depositor Education and Awareness Fund Scheme, 2026 demonstrates
IFSCA's proactive approach to building a mature and investor-friendly banking ecosystem in
GIFT IFSC. By establishing clear rules for handling unclaimed deposits, safeguarding
depositor rights, and promoting financial awareness, the framework enhances regulatory
confidence while supporting the continued growth of international banking operations in
GIFT City.
