What changed
RBI issued a follow-up circular on December 10, 2009, reinforcing its November 9, 2009 advisory on AML/CFT deficiencies in five jurisdictions. It explicitly references FATF's October 16, 2009 statement and requires banks to account for risks from those countries.
What it means for you
Co-operative banks must treat transactions linked to Iran, Uzbekistan, Pakistan, Turkmenistan, and Sao Tome and Principe as higher risk under their KYC/AML frameworks. This may trigger enhanced due diligence, stricter monitoring, and reporting obligations. Non-compliance could expose banks to regulatory action.
What you must do
- Update your AML/CFT risk assessment to include the five flagged jurisdictions.
- Instruct branch and compliance teams to apply enhanced due diligence on transactions involving these countries.
- Ensure the Principal Officer sends acknowledgment of this circular to the concerned RBI Regional Office.
Who it affects
State Co-operative Banks (StCBs), Central Co-operative Banks (DCCBs), Principal Officers of co-operative banks
Which countries are flagged in this circular?
Iran, Uzbekistan, Pakistan, Turkmenistan, and Sao Tome and Principe, as per FATF's October 16, 2009 statement.
What action must the Principal Officer take?
Acknowledge receipt of this circular to the concerned RBI Regional Office.
Does this replace the November 9, 2009 circular?
No, it reinforces and supplements the earlier advisory on AML/CFT deficiencies in those jurisdictions.