What Happened
- The Supreme Court questioned the Union Government and the Reserve Bank of India (RBI) on why information about money held in dormant or inoperative accounts of deceased persons cannot be proactively shared with their legal heirs or nominees.
- The bench was hearing a petition seeking a centralised, searchable platform that would allow families to trace unclaimed financial assets — including bank deposits, insurance policies, shares, and mutual funds — belonging to deceased relatives.
- Petitioners highlighted that three separate government funds — the Depositor Education and Awareness Fund (DEAF), the Investor Education and Protection Fund (IEPF), and the Senior Citizens Welfare Fund — together hold over ₹1 lakh crore of unclaimed money.
- The Court directed the Central Government and the RBI to file updated counter-affidavits within four weeks and listed the matter for further hearing on May 5, 2026.
- The government's resistance to proactive disclosure reportedly centres on banking secrecy provisions and data protection concerns under existing banking law.
Static Topic Bridges
RBI's Depositor Education and Awareness Fund (DEAF): Mechanism and Scale
The Depositor Education and Awareness Fund (DEAF) was established by the RBI on 24 May 2014 under Section 26A of the Banking Regulation Act, 1949, inserted by the Banking Laws (Amendment) Act, 2012. Banks are mandated to transfer credit balances in accounts that have remained inoperative for 10 or more consecutive years to the DEAF. The purpose is twofold: to protect depositors' interests and to use the pooled funds to promote depositor awareness and financial literacy.
- Trigger for transfer: Any savings/current account or fixed deposit not operated for 10 years or more; the entire balance including accrued interest must be transferred.
- Claimability: There is no time limit for claiming deposits from DEAF; the original bank is obligated to repay the depositor or legal heir upon a valid claim, and subsequently claim reimbursement from RBI's DEAF.
- Banks are required (per RBI circular of 2 February 2015) to publish monthly lists of unclaimed deposits/inoperative accounts (inactive for >10 years) on their websites.
- The Centralised Web Portal "UDGAM" (Unclaimed Deposits - Gateway to Access inforMation) was launched by RBI in August 2023 to allow depositors/legal heirs to search for unclaimed deposits across multiple banks in one place.
- Despite UDGAM, coverage remains incomplete and only a subset of banks are enrolled; the petition seeks mandatory inclusion of all financial instruments (not just bank deposits).
Connection to this news: The Supreme Court's questioning targets the gap between the existing DEAF/UDGAM framework and the practical reality — heirs often do not know about the existence of accounts, let alone the UDGAM portal, making proactive disclosure essential for effective recovery.
Investor Education and Protection Fund (IEPF) and Senior Citizens Welfare Fund
Beyond bank deposits, unclaimed financial assets accumulate in two other major funds. The Investor Education and Protection Fund (IEPF) — established under Section 125 of the Companies Act, 2013 — receives dividends, matured deposits, and share application money not claimed within 7 years. The Senior Citizens Welfare Fund, established under the Finance Act, 2015, receives unclaimed amounts from PPF accounts, post office savings, and small savings schemes not claimed for 25 years.
- IEPF operates under the Ministry of Corporate Affairs; claimants can file refund claims through the IEPF Authority portal using Form IEPF-5.
- Under the Companies Act, 2013, companies must transfer unclaimed dividends to IEPF after 7 years; shareholders can reclaim by approaching the IEPF Authority.
- The IEPF also has the power to transfer the underlying shares (not just dividends) to the fund after 7 years — these too can be reclaimed.
- Senior Citizens Welfare Fund is managed by the Ministry of Finance; the unclaimed amounts come from PPF (25 years), Post Office schemes, and Kisan Vikas Patra.
- Combined unclaimed amounts across DEAF, IEPF, and Senior Citizens Welfare Fund: estimated at over ₹1 lakh crore.
- The multiplicity of funds — each with different claim procedures and portals — is the core problem: there is no single window for legal heirs to discover and recover all assets.
Connection to this news: The petition's demand for a centralised platform addresses precisely this fragmentation — a legal heir currently has to separately check RBI's UDGAM, IEPF's portal, and insurance/mutual fund portals, each with different documentation and procedures.
Banking Secrecy, Right to Information, and the Digital Personal Data Protection Act
The government's reluctance to proactively disclose account details of deceased persons stems from banking secrecy obligations under the Banking Regulation Act, 1949 (which imposes a general duty of confidentiality on banks) and privacy concerns. However, there is a competing legal principle: the right of legal heirs to know about and access the assets of a deceased person. The Digital Personal Data Protection Act, 2023 (DPDPA) adds a new dimension — personal data of deceased individuals is technically outside its scope (the Act applies to "data principals" who are living persons), but banks may still cite data sensitivity concerns.
- The Banking Regulation Act, 1949 does not have an explicit banking secrecy provision comparable to Swiss law; the duty of confidentiality is inferred from the banker-customer relationship as a common law principle.
- The RBI's KYC Master Direction requires banks to obtain nominee information at account opening; nomination under the Banking Companies (Nomination) Rules, 1985 facilitates easy settlement of claims by nominees.
- Succession Certificate (issued by civil courts under the Indian Succession Act, 1925) and Letters of Administration are the formal legal instruments by which heirs establish their right to deceased persons' assets.
- The petition before the Supreme Court argues that creating a centralised searchable database does not violate banking secrecy — it merely informs heirs that an account exists, not its balance, unless a valid claim is established.
- Digital Personal Data Protection Act, 2023 — applies only to living data principals; deceased persons' data falls outside its direct protection, potentially enabling disclosure frameworks.
Connection to this news: The Supreme Court's questioning suggests the bench views banking secrecy concerns as insufficient to deny heirs basic information about the existence of accounts — a position that, if accepted, would require amendments to RBI guidelines or new legislation for a proactive disclosure framework.
Key Facts & Data
- DEAF (Depositor Education and Awareness Fund) — established 24 May 2014; under Section 26A, Banking Regulation Act, 1949
- Transfer trigger: accounts inoperative for 10 or more years
- UDGAM portal — RBI's centralised unclaimed deposit search platform; launched August 2023
- IEPF (Investor Education and Protection Fund) — under Section 125, Companies Act, 2013; transfer after 7 years of unclaimed dividends/deposits
- Senior Citizens Welfare Fund — Finance Act, 2015; unclaimed PPF/post office savings after 25 years
- Total unclaimed funds across three pools: estimated over ₹1 lakh crore
- Next hearing: May 5, 2026
- Banking Regulation Act, 1949 — Section 26A basis for DEAF
- Banking Laws (Amendment) Act, 2012 — inserted Section 26A into the BR Act
- Digital Personal Data Protection Act, 2023 — applies to living data principals only; deceased persons outside scope
- Indian Succession Act, 1925 — Succession Certificate mechanism for heirs
- Banking Companies (Nomination) Rules, 1985 — nominee settlement at account level