What changed
FIU-IND observed that compliance with KYC/AML/CFT measures under PMLA, 2002 remains very poor, with some banks not even appointing a sufficiently senior Principal Officer. RBI now mandates that co-operative banks appoint an officer of at least Deputy General Manager rank as Principal Officer, supported by a team experienced in KYC/AML/CFT issues.
What it means for you
Co-operative banks face increased regulatory scrutiny and must urgently strengthen their AML frameworks. Failure to comply could lead to supervisory action. The requirement for a senior Principal Officer signals that RBI expects top-level ownership of compliance, not just a box-ticking exercise.
What you must do
- Appoint a Principal Officer of at least Deputy General Manager rank immediately.
- Ensure the Principal Officer is supported by a team of officers well-versed in KYC/AML/CFT.
- Strictly comply with PMLA, 2002 obligations for filing CTRs, STRs, and CCRs to FIU-IND within stipulated timelines.
- Review and strengthen internal KYC/AML policies and training programs.
Who it affects
State Co-operative Banks, Central Co-operative Banks, Principal Officers of co-operative banks, Compliance and AML teams in co-operative banks
What is the minimum rank required for the Principal Officer as per this circular?
The Principal Officer must be of at least Deputy General Manager rank.
What reports must banks file under PMLA, 2002?
Banks must file Cash Transaction Reports (CTRs), Suspicious Transaction Reports (STRs), and Counterfeit Currency Reports (CCRs) to FIU-IND within the stipulated period.
Why did RBI issue this circular?
FIU-IND observed very poor compliance with KYC/AML/CFT measures under PMLA, 2002, including failure to appoint a senior Principal Officer. RBI is mandating corrective steps.