What changed
RBI issued a circular on April 6, 2011, referencing FATF's October 22, 2010 statement. It advises all Authorised Persons (Indian Agents) under MTSS to consider the information in that statement. This builds on earlier guidance from November 2009.
What it means for you
Indian banks acting as MTSS agents must align their AML/CFT checks with FATF's latest expectations. Non-compliance could attract penalties under FEMA and PMLA. This reinforces the need for robust due diligence on cross-border inward remittances.
What you must do
- Review FATF's October 2010 statement and update your AML/CFT policies accordingly.
- Ensure your Principal Officer acknowledges receipt of this circular.
- Communicate the updated guidelines to all relevant constituents.
- Verify that your cross-border inward remittance processes comply with PMLA and FEMA provisions.
Who it affects
All Authorised Persons (Indian Agents) under Money Transfer Service Scheme, Banks handling cross-border inward remittances, Compliance and AML/CFT teams in banks
What is the key action required from MTSS agents?
Agents must consider the information in FATF's October 2010 statement and ensure their AML/CFT procedures are updated. They also need to inform their constituents and have their Principal Officer acknowledge receipt of the circular.
What are the legal bases for this circular?
The circular is issued under Section 10(4) and Section 11(1) of FEMA, 1999, and under PMLA, 2002, as amended. Non-compliance can attract penalties under these acts.