What changed
RBI updated its earlier October 28, 2009 circular on AML/CFT risks by incorporating FATF's latest October 16, 2009 statement. The list of high-risk jurisdictions remains the same: Iran, Uzbekistan, Pakistan, Turkmenistan, and Sao Tome and Principe. UCBs are now explicitly advised to account for these risks in their KYC/AML processes.
What it means for you
Urban Co-operative Banks must enhance due diligence for transactions and relationships involving these five countries. This reinforces the need for robust AML/CFT controls to avoid regulatory penalties. Lenders should review their customer risk profiling and transaction monitoring systems to align with FATF's updated guidance.
What you must do
- Update your AML/CFT risk assessment to include the five specified jurisdictions.
- Ensure enhanced due diligence for any customer or transaction linked to Iran, Uzbekistan, Pakistan, Turkmenistan, or Sao Tome and Principe.
- Have your Compliance Officer or Principal Officer acknowledge receipt of this circular to the respective RBI Regional Office.
- Brief your KYC/AML teams on FATF's October 2009 statement and its implications.
Who it affects
All AD I Category Urban Co-operative Banks, Compliance Officers and Principal Officers of UCBs, KYC/AML operations teams in UCBs
Which jurisdictions are flagged in this circular?
The circular highlights AML/CFT regime deficiencies in Iran, Uzbekistan, Pakistan, Turkmenistan, and Sao Tome and Principe, as per FATF's October 2009 statement.
What action is required from the Compliance Officer?
The Compliance Officer or Principal Officer must send an acknowledgment of receipt of this circular to the concerned RBI Regional Office.
Does this replace the earlier October 2009 circular?
No, it supplements the October 28, 2009 circular by incorporating FATF's updated statement. The list of high-risk countries remains unchanged.