What changed
RBI forwarded a new FATF Statement dated February 25, 2011, updating the list of jurisdictions with strategic AML/CFT deficiencies. This supersedes the earlier FATF statement referenced in the March 17, 2011 circular. Banks are now required to consider this latest information.
What it means for you
Urban co-operative banks must update their AML/CFT risk frameworks to reflect the latest FATF-identified high-risk jurisdictions. This may impact customer due diligence, transaction monitoring, and reporting for any dealings with entities from those jurisdictions. Non-compliance could expose banks to regulatory scrutiny and reputational risk.
What you must do
- Review the enclosed FATF Statement dated February 25, 2011, and identify the listed jurisdictions.
- Update your bank's AML/CFT risk assessment and policies to account for these jurisdictions.
- Ensure the Compliance Officer/Principal Officer acknowledges receipt of this circular to the respective RBI Regional Office.
- Brief relevant staff on enhanced due diligence requirements for transactions involving listed jurisdictions.
Who it affects
All AD Category I Primary (Urban) Co-operative Banks, Compliance Officers/Principal Officers of UCBs, AML/CFT teams in urban co-operative banks
What is the FATF Statement and why is it important for my bank?
The FATF Statement identifies countries with strategic deficiencies in anti-money laundering and combating financing of terrorism frameworks. Banks must consider this list to apply enhanced due diligence and avoid facilitating illicit flows.
Do we need to report anything to RBI after reviewing the Statement?
Yes, the Compliance Officer/Principal Officer must acknowledge receipt of this circular to the concerned RBI Regional Office. No other reporting is specified in this circular.
What happens if we ignore this circular?
Ignoring it could lead to regulatory non-compliance, potential penalties, and increased risk of money laundering or terrorist financing through your bank. It may also affect your AD Category I license.