What changed
All Authorized Persons under FEMA Section 10(1) are now explicitly covered under PMLA, 2002 as amended in 2009. The existing KYC/AML/CFT guidelines for money changing activities have been revised to align with FATF recommendations, replacing the previous AML guidelines in Annex-I of the March 2009 circular with new F-Part I, II, and III.
What it means for you
Banks and other Authorized Persons must update their KYC/AML/CFT policies for money changing operations and get board approval. The revised framework imposes stricter compliance obligations, including for agents and franchisees, with non-compliance attracting penal provisions under PMLA and FEMA.
What you must do
- Review and revise your KYC/AML/CFT policy framework for money changing activities to align with the new F-Part I guidelines.
- Obtain board approval for the updated policy framework.
- Ensure all agents and franchisees adhere to the revised guidelines, with franchisers taking full responsibility.
- Communicate the circular's contents to all relevant constituents and staff.
- Update internal compliance manuals and training programs to reflect the changes.
Who it affects
All Authorized Persons under FEMA Section 10(1) engaged in money changing activities, Agents and franchisees of Authorized Persons, Compliance and KYC/AML teams at banks and financial institutions, Board of directors of Authorized Persons
What is the key change in this circular?
The circular brings all Authorized Persons under PMLA, 2002 for money changing activities and replaces the earlier AML guidelines with revised KYC/AML/CFT norms aligned with FATF recommendations.
Are agents and franchisees also covered?
Yes, the guidelines apply mutatis mutandis to agents and franchisees, and the franchiser is solely responsible for ensuring their compliance.
What happens if we don't comply?
Non-compliance will attract penal provisions under the relevant Acts (PMLA, FEMA) and Rules made thereunder.