What changed
The Unlawful Activities (Prevention) Act, 1967 was amended in 2008, and the Government issued an Order on August 27, 2009 detailing procedure for implementation of Section 51A. RBI now advises co-operative banks to strictly follow this Order, including maintaining updated designated lists and reporting matches within 24 hours to Joint Secretary (IS.I), MHA, with copies to RBI and FIU-IND.
What it means for you
Co-operative banks must now screen all existing and new accounts against UN-designated terrorist lists. Any match requires immediate reporting to Joint Secretary (IS.I), Ministry of Home Affairs within 24 hours via fax, phone, and email, with copies to RBI and FIU-IND. Freezing occurs after MHA verification within 5 working days.
What you must do
- Update and maintain the consolidated designated list in electronic form as circulated by RBI.
- Screen all new account openings and existing accounts against the designated list regularly.
- Report any matching customer details to Joint Secretary (IS.I), Ministry of Home Affairs within 24 hours via fax (011-23092569), phone (011-23092736), and email.
- Send a copy of the communication to RBI (Chief General Manager, DBOD, AML Division) and FIU-IND.
- Prevent designated persons from conducting financial transactions if match is beyond doubt, under intimation to Joint Secretary (IS.I), MHA.
- File a Suspicious Transaction Report (STR) with FIU-IND covering all transactions in matched accounts.
Who it affects
All State Co-operative Banks (StCBs), All District Central Co-operative Banks (DCCBs), Compliance and AML teams at co-operative banks, Branch managers handling account opening and monitoring
What is the deadline for reporting a match with the designated list?
Banks must inform the Joint Secretary (IS.I), Ministry of Home Affairs within 24 hours of finding a customer whose details match the designated individuals/entities list, via fax, phone, and email, with copies to RBI and FIU-IND.
Does this apply to existing accounts or only new ones?
Both. Banks must scan all existing accounts to ensure no account is held by or linked to any designated individual/entity, and also check new accounts before opening.
What actions must banks take if a match is found?
Immediately inform the Joint Secretary (IS.I), Ministry of Home Affairs via fax, phone, and email within 24 hours, send copies to RBI and FIU-IND, prevent financial transactions if match is beyond doubt, and file an STR with FIU-IND.