What changed
The Unlawful Activities (Prevention) Act, 1967 was amended by the Unlawful Activities (Prevention) Amendment Act, 2008, and the Government issued an Order dated August 27, 2009 detailing the procedure for implementation of Section 51A relating to freezing/seizing assets of designated individuals/entities. RBI now requires RRBs to strictly follow this Order, including reporting matches within 24 hours to the Joint Secretary (IS.I), Ministry of Home Affairs via fax, phone, and email.
What it means for you
RRBs must now implement a more rigorous and time-bound process for freezing assets linked to UN-sanctioned individuals/entities. This increases compliance burden but strengthens India's anti-terror financing framework. Banks need to ensure their systems can quickly identify and report matches to avoid penalties.
What you must do
- Update and maintain designated lists of individuals/entities in electronic form as per the Order.
- Run regular checks on all existing and new accounts against these lists.
- Report any match within 24 hours to the Joint Secretary (IS.I), Ministry of Home Affairs via fax (011-23092569), phone (011-23092736), and email.
- Also send a copy of the communication to RBI's UAPA nodal officer and FIU-India.
- Ensure meticulous compliance with the UAPA Order dated August 27, 2009.
Who it affects
All Regional Rural Banks (RRBs), Compliance departments of RRBs, Branch managers handling account opening and monitoring
What is the deadline for reporting a match with a designated individual/entity?
RRBs must inform the Joint Secretary (IS.I), Ministry of Home Affairs within 24 hours of finding a match, providing full particulars of the funds or assets held, via fax, phone, and email.
Does this circular apply to existing accounts as well?
Yes, RRBs must scan all existing accounts to ensure no account is held by or linked to any listed individual/entity.