The International Financial Services Centres Authority issued Guidance No. IFSCA-FMPP0BR/17/2026-Banking dated August 20, 2026, advising Heads/CEOs of IFSC Banking Units (IBUs) to remain vigilant regarding transactions in Non-resident Indian (NRI) accounts. As on June 30, 2026, IBUs had opened 30,309 NRI bank accounts holding USD 1.96 billion in deposits and had also been opening loan accounts to provide leverage for placement of deposits under the FCNR(B) scheme of the Reserve Bank of India. The guidance refers to multiple fraud incidents in onshore India involving insiders allegedly creating loans against customers’ fixed deposits using forged documents and transferring the amounts to other accounts. Identified vulnerabilities include breach of privileged access, inadequate monitoring of dormant accounts, weak supervision and audit processes, and lack of real-time alerts and independent confirmations for NRI customers. The Authority noted that its internet banking requirements mandate SMS and/or email alerts for every transaction and dual-layer authentication through hardware tokens and/or OTPs for initiating transactions from IBU accounts. Heads/CEOs of IBUs were advised to be vigilant about such frauds, and the guidance may be shared with the IBU’s Governing Body.
International Financial Services Centres Authority
Guidance No. IFSCA-FMPP0BR/17/2026-Banking | Dated: August 20, 2026
Heads/CEOs of IFSC Banking Units (IBUs)
Madam/ Sir,
Subject: Monitoring of transactions in accounts of Non-resident Indians (NRIs)
1. As on June 30, 2026, 30309 bank accounts of Non-resident Indians (NRIs) have been opened by IBUs holding deposits of USD 1.96 billion. IBUs have also been opening loan accounts for NRIs to provide leverage for placement of deposits under the FCNR(B) scheme of the Reserve Bank of India.
2. Attention of the Heads/CEOs of IFSC Banking Units (IBUs) is drawn to the multiple incidents of frauds committed in bank accounts held by NRIs in onshore India. While the particulars of the frauds vary from case to case, the modus operandi involve insiders (employees/contractual staff) creating a loan against a customer’s fixed deposit using forged documents without the customer being aware of the same and siphoning the amount from such loan account to other accounts within the bank or in another bank, usually in collusion with other insiders.
3. Analysis of the incidents reveal that the key vulnerabilities exploited for undertaking such frauds include breach of privileged access (including shared passwords and credentials), inadequate monitoring of dormant accounts, weak supervision and audit processes focused on compliance rather than transaction-level analysis. Another critical gap is the lack of ability of the banks to alert their NRI customers when actions are taken against their fixed deposits in the form of real-time notifications and independent confirmations.
4. As you are aware, the Authority, as part of its requirement for IBUs to provide internet banking facilities to its customers, has also mandated the requirement of alert generation through SMS and/or email for every transaction undertaken on such account. Additionally, the circular on internet banking also mandates dual-layer authentication (by means of hardware tokens and/or OTPs) for initiating transactions from accounts opened with IBUs.
5. Heads/CEOs of IFSC Banking Units (IBUs) are advised to be vigilant about the possibility of such frauds being committed in the NRI accounts held with them.
6. This guidance may be shared with the members of the Governing Body of the IBU.
Yours faithfully,
(Supriyo Bhattacharjee)
Executive Director
Head – Department of Banking
