What changed
RBI updated its earlier October 1, 2009 advisory by incorporating FATF's latest statement dated October 16, 2009. The list of high-risk jurisdictions remains the same: Iran, Uzbekistan, Pakistan, Turkmenistan, and Sao Tome and Principe. Banks must now explicitly account for risks from these countries' AML/CFT regime gaps.
What it means for you
Banks and financial institutions must treat transactions involving these five countries with heightened scrutiny. This reinforces existing KYC/AML obligations and may require additional documentation or transaction monitoring. Non-compliance could expose banks to regulatory action and reputational risk.
What you must do
- Update internal AML/CFT risk assessments to include the five specified jurisdictions.
- Instruct relationship managers and compliance teams to apply enhanced due diligence for any exposure to Iran, Uzbekistan, Pakistan, Turkmenistan, or Sao Tome and Principe.
- Ensure the Principal Officer acknowledges receipt of this circular and disseminates it to relevant departments.
- Review and, if needed, strengthen transaction monitoring systems for cross-border flows from these countries.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Local Area Banks, Financial Institutions
Which countries are flagged in this circular?
Iran, Uzbekistan, Pakistan, Turkmenistan, and Sao Tome and Principe are identified as having deficiencies in their AML/CFT regimes.
What action does RBI expect from banks?
Banks must factor in the risks from these deficiencies in their KYC/AML procedures and apply enhanced due diligence for related transactions.
Does this replace the earlier October 2009 circular?
No, it supplements it. The earlier circular (dated October 1, 2009) is referenced, and this one adds FATF's latest statement as of October 16, 2009.