FATF-identified AML/CFT risk countries: UCBs must act
Current · Source: Reserve Bank of India · RBI/2009-10/377 · issued 01 Apr 2010 · ~2 min read
Quick answerRBI directs all AD I category UCBs to factor in AML/CFT deficiencies of Iran, Angola, DPRK, Ecuador, Ethiopia, Pakistan, Turkmenistan, and Sao Tome and Principe as per FATF's February 2010 statement. UCBs must assess and mitigate risks from these jurisdictions.
The rule, in the simplest words
Banks must check if a customer or transaction involves any of these 8 countries: Iran, Angola, North Korea (DPRK), Ecuador, Ethiopia, Pakistan, Turkmenistan, and Sao Tome and Principe.
For Iran, banks must apply extra strong checks (called countermeasures) because it has very high money-laundering and terror-financing risk.
For Angola, North Korea, Ecuador, and Ethiopia, banks must think about the risk and do extra checks because these countries have not made a plan to fix their weak rules.
For Pakistan, Turkmenistan, and Sao Tome and Principe, banks must still be careful because these countries have not fully fixed their weak rules yet.
The bank's compliance officer must tell the RBI regional office that they got this rule.
How it plays out — a real example
A KYC & compliance officer in Indore receives a loan application from a customer who recently moved from Pakistan. Remembering the RBI rule, the officer flags the account for enhanced due diligence, asks for extra documents like proof of income and source of funds, and checks the customer's name against the FATF list before approving the gold loan.
What changed
FATF updated its list of strategic AML/CFT deficient jurisdictions on February 18, 2010, dividing them into three groups: those requiring countermeasures (Iran), those without an action plan (Angola, DPRK, Ecuador, Ethiopia), and those with ongoing deficiencies (Pakistan, Turkmenistan, Sao Tome and Principe). RBI now requires UCBs to consider risks from these countries, superseding the earlier December 2009 circular.
What it means for you
UCBs must enhance due diligence for transactions or relationships involving these jurisdictions, as they pose higher money laundering and terrorist financing risks. Failure to adjust risk assessments could expose banks to regulatory action and reputational damage. This aligns with global FATF standards to protect the financial system.
What you must do
Update your AML/CFT risk assessment to include the three FATF groups: Iran (countermeasures), Angola/DPRK/Ecuador/Ethiopia (no action plan), and Pakistan/Turkmenistan/Sao Tome and Principe (ongoing deficiencies).
Apply enhanced due diligence or countermeasures for transactions linked to these countries, especially Iran.
Ensure your Compliance Officer/Principal Officer acknowledges receipt of this circular to the respective RBI Regional Office.
Review and strengthen internal controls to monitor and report suspicious transactions involving these jurisdictions.
Who it affects
All AD I category Urban Co-operative Banks (UCBs), Compliance Officers and Principal Officers of UCBs, Risk management teams handling cross-border transactions
❓ Common questions
What are the three groups of countries in the FATF statement?
Group 1: Iran (subject to countermeasures). Group 2: Angola, DPRK, Ecuador, Ethiopia (no action plan committed). Group 3: Pakistan, Turkmenistan, Sao Tome and Principe (previously identified, deficiencies remain).
What action must UCBs take for Iran?
UCBs must apply countermeasures to protect the financial system from ongoing ML/FT risks from Iran, as called by FATF.
Do UCBs need to report receipt of this circular?
Yes, the Compliance Officer/Principal Officer must acknowledge receipt to the concerned RBI Regional Office.
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/377
UBD.BPD. (PCB).Cir. No.53 /14.01.062/2009-10
April 1, 2010
The Chief Executive Officers of
All AD I Category Urban Co-operative Banks
(As per List enclosed)
Dear Sir / Madam,
Know Your Customer (KYC) Norms / Anti-Money Laundering (AML) Standards / Combating of Financing of Terrorism (CFT)
Please refer to our circular UBD (PCB) CO.BPD.Cir.No.33/14.01.062/2009-10 dated December 17, 2009 on risks arising from the deficiencies in AML / CFT regime of Iran,Uzbekistan, Pakistan, Turkmenistan, Sao Tome and Principe.
2. The Financial Action Task Force (FATF) has issued a further Statement on February 18, 2010 on the subject ( copy enclosed ). It may be observed that the instant FATF statement divides the strategic AML/CFT deficient jurisdictions into three groups as under:
Jurisdictions subject to FATF call on its members and other jurisdictions to apply countermeasures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdiction: Iran
Jurisdictions with strategic AML/CFT deficiencies that have not committed to an action plan developed with the FATF to address key deficiencies as of February 2010. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction: Angola, Democratic People's Republic of Korea (DPRK), Ecuador and Ethiopia.
Jurisdictions previously publicly identified by the FATF as having strategic AML/ CFT deficiencies, which remain to be addressed as of February 2010: Pakistan, Turkmenistan and Sao Tome and Principe.
3. UCBs are accordingly advised to take into account risks arising from the deficiencies in AML / CFT regime of these countries.
4. The Compliance Officer / Principal Officer of the bank should acknowledge receipt of this circular to our Regional Office concerned .
Yours faithfully
(Monisha Chakraborty)
Deputy General Manager
Encl: As above.
List of AD I category UCBs
1.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/377 · issued 01 Apr 2010. The plain-English explanation above is BankPulse’s own independent summary.
Update your AML/CFT risk assessment to include the three FATF groups: Iran (countermeasures), Angola/DPRK/Ecuador/Ethiopia (no action plan), and Pakistan/Turkmenistan/Sao Tome and Principe (ongoing deficiencies).
Apply enhanced due diligence or countermeasures for transactions linked to these countries, especially Iran.
📜 Compliance
Ensure your Compliance Officer/Principal Officer acknowledges receipt of this circular to the respective RBI Regional Office.
Review and strengthen internal controls to monitor and report suspicious transactions involving these jurisdictions.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Branch Manager at a bank this circular applies to (All AD I category Urban Co-operative Banks (UCBs), Compliance Officers and Principal Officers of UCBs, Risk management teams handling cross-border transactions), your first concrete step on “FATF-identified AML/CFT risk countries: UCBs must act” is: “Update your AML/CFT risk assessment to include the three FATF groups: Iran (countermeasures), Angola/DPRK/Ecuador/Ethiopia (no action plan), and Pakistan/Turkmenistan/Sao Tome and Principe (ongoing deficiencies).” (RBI issued this 01 Apr 2010).
Circular: RBI/2009-10/377 -- FATF-identified AML/CFT risk countries: UCBs must act
Issued: 01 Apr 2010
Action required: Update your AML/CFT risk assessment to include the three FATF groups: Iran (countermeasures), Angola/DPRK/Ecuador/Ethiopia (no action plan), and Pakistan/Turkmenistan/Sao Tome and Principe (ongoing deficiencies).
Action required: Apply enhanced due diligence or countermeasures for transactions linked to these countries, especially Iran.
Action required: Ensure your Compliance Officer/Principal Officer acknowledges receipt of this circular to the respective RBI Regional Office.
Action required: Review and strengthen internal controls to monitor and report suspicious transactions involving these jurisdictions.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5563&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.