Current · Source: Reserve Bank of India · RBI/2010-11/434 · issued 17 Mar 2011 · ~1 min read
Quick answerRBI has directed urban co-operative banks to account for AML/CFT deficiencies in Iran and DPRK when dealing with entities from these jurisdictions, following FATF's October 2010 statement.
The rule, in the simplest words
Banks must be extra careful when dealing with people or companies from Iran because it has big problems with money laundering (hiding dirty money) and funding terrorism (giving money to bad groups).
Banks must also watch out for risks from North Korea (DPRK) because it has not fixed its money safety rules, even though it was asked to.
Banks need to check more closely any business or money transfers involving Iran or North Korea, like asking more questions or watching the transaction more carefully.
The person in charge of following these rules at the bank (compliance officer) must tell the RBI (India's central bank) that they got this message.
How it plays out — a real example
Priya, the compliance officer at a co-operative bank in Surat, gets a request from a customer to send money to a supplier in Iran. Remembering the RBI rule, she asks for extra documents about the supplier's business and checks the transaction more closely to make sure it's not linked to money laundering or terrorism funding, then records her review in the bank's system.
What changed
RBI issued a circular on March 17, 2011, referencing FATF's October 22, 2010 statement that categorizes Iran as requiring countermeasures and DPRK as having strategic deficiencies without an action plan. Banks must now consider these risks in business relationships and transactions.
What it means for you
Urban co-operative banks must enhance due diligence for transactions involving Iran or DPRK to mitigate money laundering and terrorist financing risks. This aligns with global FATF standards and may require additional monitoring or reporting.
What you must do
Review and update AML/CFT policies to address risks from Iran and DPRK as per FATF guidance.
Ensure compliance officers acknowledge receipt of this circular to the respective RBI regional office.
Train staff on enhanced due diligence for transactions with persons or entities from these jurisdictions.
Who it affects
All AD Category I Primary (Urban) Co-operative Banks, Compliance officers and principal officers of these banks
❓ Common questions
What are the two groups of jurisdictions mentioned in the FATF statement?
Iran is subject to countermeasures due to substantial ML/FT risks, while DPRK has strategic deficiencies without an action plan, requiring risk consideration.
What action must banks take regarding these jurisdictions?
Banks must account for AML/CFT deficiencies when entering business relationships or transactions with persons or entities from Iran or DPRK.
Who needs to acknowledge receipt of this circular?
The Compliance Officer or Principal Officer of the bank must acknowledge receipt to the relevant RBI regional office.
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/434
UBD.CO.BPD (PCB) Cir.No. 6 /14.01.062/2010-11
March 17, 2011
The Chief Executive Officer of
All AD Category I Primary (Urban) Co-operative Banks
Dear Sir,
Anti-Money Laundering (AML)/Combating of Financing of Terrorism (CFT) – Standards
Please refer to our circular UBD (PCB) CO.BPD.Cir. No.7/14.01.062/2010-11 dated August 12, 2010 on risks arising from the deficiencies in AML/CFT regime of Iran, Democratic People’s Republic of Korea (DPRK), Sao Tome and Principe.
2. Financial Action Task Force (FATF) has issued a further Statement on October 22, 2010 on the subject ( copy enclosed ). It may be observed that the statement divides the strategic AML/CFT deficient jurisdictions into two 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 October 2010. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction: Democratic People's Republic of Korea (DPRK).
3. The Urban Co-operative Banks are accordingly advised to take into account risks arising from the deficiencies in AML/CFT regime of these countries, while entering into business relationships and transactions with persons (including legal persons and other financial institutions) from or in these countries/ jurisdictions.
4. The Compliance Officer/Principal Officer of the bank should acknowledge receipt of this circular to our Regional Office concerned.
Yours faithfully,
(M. Nanda Kumar)
Deputy General Manager
Encl: As above
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/434 · issued 17 Mar 2011. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (All AD Category I Primary (Urban) Co-operative Banks, Compliance officers and principal officers of these banks), your first concrete step on “RBI Updates AML/CFT Risks for Iran and DPRK” is: “Review and update AML/CFT policies to address risks from Iran and DPRK as per FATF guidance.” (RBI issued this 17 Mar 2011).
Circular: RBI/2010-11/434 -- RBI Updates AML/CFT Risks for Iran and DPRK
Issued: 17 Mar 2011
Action required: Review and update AML/CFT policies to address risks from Iran and DPRK as per FATF guidance.
Action required: Ensure compliance officers acknowledge receipt of this circular to the respective RBI regional office.
Action required: Train staff on enhanced due diligence for transactions with persons or entities from 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=6293&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.
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