FATF Statement on AML/CFT Deficiencies: Action for Authorised Persons
Current · Source: Reserve Bank of India · RBI/2010-11/536 · issued 20 May 2011 · ~1 min read
Quick answerRBI directs authorised persons to consider FATF's February 2011 statement on jurisdictions with strategic AML/CFT deficiencies and complete action plans within set timeframes. Non-compliance attracts penal provisions under FEMA and PMLA.
The rule, in the simplest words
Banks must check a special list from FATF (a global group that fights money laundering) of countries that are not doing enough to stop bad money practices.
If a country is on that list, banks must be extra careful when exchanging money for customers from those places.
Banks must tell their customers about this rule and make sure they follow it.
If banks don't follow this rule, they can be punished under two laws: FEMA (rules for foreign money) and PMLA (rules against money laundering).
How it plays out — a real example
A KYC & compliance officer in Indore receives a customer who wants to exchange a large amount of foreign currency from a country on the FATF list. The officer remembers this RBI rule, so she asks for extra documents to check where the money came from, and she reports the transaction to her Principal Officer to stay safe from penalties.
What changed
RBI forwarded FATF's February 25, 2011 statement, which calls on listed jurisdictions to implement their action plans within the timeframe. Authorised persons must now consider this information and bring it to the notice of constituents and customers.
What it means for you
Banks and authorised persons must factor in FATF's updated list of deficient jurisdictions when conducting money changing activities. This reinforces the need for enhanced due diligence and compliance with AML/CFT standards, with penalties for non-compliance under FEMA and PMLA.
What you must do
Review the enclosed FATF statement and consider the information for money changing activities.
Notify your Principal Officer to acknowledge receipt of this circular.
Bring the circular's contents to the notice of your constituents and customers.
Ensure compliance with AML/CFT guidelines to avoid penal provisions under FEMA and PMLA.
Who it affects
All authorised persons handling money changing activities, Principal Officers of authorised entities, Constituents and customers of authorised persons
❓ Common questions
What is the purpose of this circular?
It advises authorised persons to consider FATF's February 2011 statement on jurisdictions with strategic AML/CFT deficiencies and to complete action plans within the timeframe.
What are the legal bases for these directions?
The directions are issued under Section 10(4) and Section 11(1) of FEMA, 1999, and under PMLA, 2002, as amended. Non-compliance attracts penal provisions.
Who needs to acknowledge receipt of this circular?
The Principal Officer of each authorised person must acknowledge receipt of this circular letter.
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/536
A.P. (DIR Series) Circular No. 65
May 20, 2011
To,
All Authorised Persons
Madam/ Dear Sir,
Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT) Standards - Money changing activities
Please refer to our A.P.(DIR Series) Circular No.51 { A.P.(FL/RL Series) Circular No.13} dated April 6, 2011 forwarding the Financial Action Task Force (FATF) Statement identifying a list of jurisdictions which have 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 timeframe. The FATF, in the Statement has called upon its members to consider the information given in the statement.
3. Authorised Persons are accordingly advised to consider the information contained in the enclosed Statement.
4. Authorised Persons may bring the contents of this circular to the notice of their constituents and customers concerned.
5. Please advise your Principal Officer to acknowledge receipt of this circular letter.
6. The directions contained in this Circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999)and also under the, Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 and Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005 as amended from time to time. Non-compliance with the guidelines would attract penal provisions of the Acts concerned or Rules made there under.
Yours faithfully,
(Meena Hemchandra)
Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/536 · issued 20 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 authorised persons handling money changing activities, Principal Officers of authorised entities, Constituents and customers of authorised persons), your first concrete step on “FATF Statement on AML/CFT Deficiencies: Action for Authorised Persons” is: “Review the enclosed FATF statement and consider the information for money changing activities.” (RBI issued this 20 May 2011).
Circular: RBI/2010-11/536 -- FATF Statement on AML/CFT Deficiencies: Action for Authorised Persons
Issued: 20 May 2011
Action required: Review the enclosed FATF statement and consider the information for money changing activities.
Action required: Notify your Principal Officer to acknowledge receipt of this circular.
Action required: Bring the circular's contents to the notice of your constituents and customers.
Action required: Ensure compliance with AML/CFT guidelines to avoid penal provisions under FEMA and PMLA.
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=6423&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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