What changed
RBI issued a circular on April 23, 2010, referencing a UN Security Council 1267 Committee note from January 19, 2010, that updated the consolidated list of terrorist-linked individuals and entities. NBFCs and RNBCs are now required to use this updated list for customer screening.
What it means for you
Banks and NBFCs must integrate the latest UN terror list into their KYC and AML processes to prevent accounts linked to designated terrorists. Failure to comply could lead to regulatory action and reputational risk. This reinforces the need for robust screening systems.
What you must do
- Update your internal systems with the latest UN consolidated list from the provided URL.
- Screen all new account applications against the updated list before opening accounts.
- Conduct a retrospective review of all existing accounts to identify any matches with the list.
- Ensure the Compliance Officer acknowledges receipt of this circular to the relevant DNBS Regional Office.
Who it affects
All Non-Banking Financial Companies (NBFCs), Residuary Non-Banking Companies (RNBCs), Compliance Officers and Principal Officers of NBFCs/RNBCs
What is the source of the list we need to use?
The list is the UN Security Council's consolidated list of individuals and entities linked to Al-Qaida and Taliban, available on the UN website at http://www.un.org/sc/committees/1267/consolist.shtml.
Do we need to check only new accounts or also existing ones?
Both. You must ensure new accounts are not linked to listed entities, and you must scan all existing accounts to identify any matches.
Who should we inform after compliance?
The Compliance Officer or Principal Officer of your company should acknowledge receipt of this circular to the concerned Regional Office of DNBS in whose jurisdiction your NBFC/RNBC operates.