What changed
RBI expanded the list of jurisdictions requiring enhanced due diligence beyond FATF statements to include publicly available information. It mandated ongoing monitoring of transactions from countries that insufficiently apply FATF recommendations, with written findings retained for authorities.
What it means for you
Banks acting as Indian Agents under MTSS must now proactively identify and monitor high-risk jurisdictions using public sources, not just FATF lists. This increases compliance burden and requires robust transaction monitoring systems to detect suspicious cross-border remittances.
What you must do
- Update KYC/AML policies to include publicly available information for identifying high-risk jurisdictions.
- Implement ongoing monitoring of transactions from countries that do not or insufficiently apply FATF recommendations.
- Ensure sub-agents under MTSS adhere to these enhanced KYC/AML guidelines.
- Retain written findings and documents for transactions with no apparent lawful purpose and make them available to RBI on request.
Who it affects
Authorised Persons (Indian Agents) under Money Transfer Service Scheme, Sub-agents of Indian Agents under MTSS, Banks handling cross-border inward remittances
What additional sources can we use to identify high-risk jurisdictions?
RBI now allows using publicly available information, such as government reports or international assessments, in addition to FATF statements, to identify countries that insufficiently apply FATF recommendations.
What must we do if a transaction has no apparent lawful purpose?
Examine the background and purpose, document written findings, retain all related documents, and make them available to RBI or other authorities upon request.
Are sub-agents also required to follow these guidelines?
Yes, these guidelines apply mutatis mutandis to all sub-agents, and Indian Agents are solely responsible for ensuring their sub-agents comply.