What changed
RBI issued a circular on May 20, 2011, referencing a UN Security Council note from April 28, 2011, that updated the consolidated list of terrorist individuals and entities. All NBFCs and RNBCs are now required to incorporate these changes into their screening processes.
What it means for you
NBFCs and RNBCs must proactively check all new and existing customers against the updated UN list to prevent any association with designated terrorists. Non-compliance could lead to regulatory action, and lenders need to strengthen their KYC and AML frameworks to avoid penalties.
What you must do
- Update your internal systems with the latest UNSC 1267 consolidated list from the UN website.
- Screen all new account applicants against the list before account opening.
- Conduct a retrospective scan of all existing accounts to identify any matches.
- Report any matches to the appropriate authorities as per regulatory guidelines.
- Maintain records of screening activities for audit and compliance purposes.
Who it affects
All Non-Banking Financial Companies (NBFCs), All Residuary Non-Banking Companies (RNBCs)
Where can I find the latest consolidated list of terrorist individuals and entities?
The complete consolidated list is available on the UN website at http://www.un.org/sc/committees/1267/consolist.shtml.
Do I need to screen only new accounts or also existing ones?
Both. You must screen new accounts before opening them and also scan all existing accounts to ensure none are linked to listed individuals or entities.
What should I do if I find a match in my existing accounts?
You should immediately report the match to the relevant authorities as per RBI and UN guidelines. The circular does not specify further steps, but standard AML protocols apply.