FATF AML/CFT Update for Urban Co-op Banks (May 2011)
Current · Source: Reserve Bank of India · RBI/2010-11/502 · issued 02 May 2011 · ~2 min read
Quick answerRBI directs all AD Category I Primary (Urban) Co-operative Banks to consider the FATF Statement of February 25, 2011, listing jurisdictions with strategic AML/CFT deficiencies. Banks must factor this into their risk assessments and compliance processes.
The rule, in the simplest words
RBI tells urban co-op banks to look at a new FATF (a global group that fights money laundering) list from February 25, 2011, which names countries with weak rules against money laundering and terror funding.
Banks must use this list to check if their customers or deals involve those countries, and be extra careful with them.
The bank's compliance officer (the person in charge of following rules) must send a note to the RBI regional office saying they got this update.
This new list replaces an older one from March 17, 2011, so banks should throw away the old list and use this one.
How it plays out — a real example
A KYC & compliance officer in Indore is processing a new account for a customer who sends money to a country on the FATF list. She remembers the May 2011 RBI circular and asks for extra documents to prove where the money comes from, making sure her bank follows the rules and stays safe from risks.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/502
UBD.CO.BPD (PCB) Cir.No. 8/14.01.062/2010-11
May 2, 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 – Primary (Urban) Co-operative Banks
Please refer to our circular UBD. CO.BPD (PCB).Cir.No.7/14.01.062/2010-11 dated March 17, 2011 forwarding the Financial Action Task Force (FATF) Statement identifying a list of jurisdictions which gave strategic AML/CFT deficiencies.
2. FATF has further issued a Statement on February 25, 2011 ( copy enclosed ) calling upon jurisdictions listed in the Statement to complete the implementation of their action plan within the time frame. The FATF, in the Statement, has called upon its members to consider the information given in the Statement.
3. Urban Cooperative Banks are accordingly advised to consider the information contained in the enclosed Statement.
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)
General Manager
Encl: As above
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/502 · issued 02 May 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/Principal Officers of UCBs, AML/CFT teams in urban co-operative banks), your first concrete step on “FATF AML/CFT Update for Urban Co-op Banks (May 2011)” is: “Review the enclosed FATF Statement dated February 25, 2011, and identify the listed jurisdictions.” (RBI issued this 02 May 2011).
Action required: Review the enclosed FATF Statement dated February 25, 2011, and identify the listed jurisdictions.
Action required: Update your bank's AML/CFT risk assessment and policies to account for these jurisdictions.
Action required: Ensure the Compliance Officer/Principal Officer acknowledges receipt of this circular to the respective RBI Regional Office.
Action required: Brief relevant staff on enhanced due diligence requirements for transactions involving listed 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=6378&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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