RBI Updates AML/CFT Risks for NBFCs: Iran, DPRK & Others
Current · Source: Reserve Bank of India · RBI/2011-12/196 · issued 22 Sep 2011 · ~1 min read
Quick answerRBI directs NBFCs to assess AML/CFT risks from Iran, DPRK, and other flagged jurisdictions per FATF's June 2011 statement. Legitimate trade with Iran remains allowed. Firms must update due diligence for these countries.
The rule, in the simplest words
NBFCs must check for money‑laundering and terrorist‑financing risks when dealing with Iran, DPRK, and the countries listed by FATF (Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria, Turkey).
Legitimate trade with Iran is still allowed, but it must be monitored more closely and reported as required.
Update AML/CFT policies to include FATF’s June 2011 list and perform enhanced due diligence for any business with people or companies from those countries.
Train staff on the new risk assessment and document all risk‑mitigation steps taken.
How it plays out — a real example
A gold‑loan officer in Indore sees a customer wanting to import gold from Iran. He applies the new enhanced due diligence checks, verifies all documents, reports the transaction to compliance, and feels confident that the trade is legitimate while keeping the bank safe.
What changed
RBI issued a circular on September 22, 2011, referencing and updating the May 4, 2011 advisory. It incorporates FATF's June 24, 2011 statement, which calls for countermeasures against Iran and DPRK due to ongoing ML/FT risks. It also adds Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria, and Turkey as jurisdictions with strategic deficiencies.
What it means for you
NBFCs must now apply enhanced scrutiny to transactions involving these countries, especially Iran and DPRK, where countermeasures are urged. While legitimate trade with Iran is not barred, the risk weightage for AML/CFT compliance increases. This could lead to additional reporting or transaction monitoring for affected relationships.
What you must do
Update AML/CFT policies to include FATF's June 2011 list of high-risk jurisdictions.
Conduct enhanced due diligence for any business with persons or entities from Iran, DPRK, and the newly flagged countries.
Ensure staff are trained on the updated risk assessment for these jurisdictions.
Review existing relationships with counterparties from these countries and document risk mitigation steps.
Who it affects
All Non-Banking Financial Companies (NBFCs), Residuary Non-Banking Companies (RNBCs), Compliance and AML teams within NBFCs
❓ Common questions
Which new countries are added compared to the May 2011 circular?
The June 24, 2011 FATF statement adds Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria, and Turkey as jurisdictions with strategic AML/CFT deficiencies. The earlier list from May 2011 is referenced but not repeated in this circular.
📜 Read the original circular — full text as issued by RBI
RBI/2011-12/196
DNBS(PD).CC. No 244/03.10.42/2011-12
September 22, 2011
All Non Banking Financial Companies /
Residuary Non Banking Companies
Dear Sir,
Anti- Money Laundering (AML) / Combating of Financing of Terrorism (CFT) Standards
Please refer to Company Circular No 218 dated May 04, 2011 on Anti- Money Laundering (AML) Standards / Combating of Financing of Terrorism (CFT) giving details about risk arising from the deficiencies in AML / CFT regime of Iran, Angola, Democratic People's Republic of Korea (DPRK), Ecuador, Ethiopia, Pakistan, Turkmenistan and Sao Tome and Principe.
2. Financial Action Task Force (FATF) has issued a further statement dated June 24, 2011 on the subject ( copy enclosed ), calling on its members and other jurisdictions to apply countermeasures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML/FT) risks emanating from Iran and Democratic People's Republic of Korea (DPRK).
3. This advisory does not preclude financial institutions entering into legitimate trade and business transactions with Iran.
4. FATF has also identified Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction as described in the Statement: Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka and Syria, Turkey.
5. All NBFCs (including RNBCs) are accordingly advised to take into account risks arising from the deficiencies in AML/CFT regime of these countries, while entering into business relationships and transactions with persons (including legal persons and other financial institutions) from or in these countries/ jurisdictions.
Yours faithfully,
(Dr. Tuli Roy
)
Deputy General Manager
Encl:as above
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/196 · issued 22 Sep 2011. The plain-English explanation above is BankPulse’s own independent summary.
Review existing relationships with counterparties from these countries and document risk mitigation steps.
📜 Compliance
Update AML/CFT policies to include FATF's June 2011 list of high-risk jurisdictions.
Conduct enhanced due diligence for any business with persons or entities from Iran, DPRK, and the newly flagged countries.
Ensure staff are trained on the updated risk assessment for these jurisdictions.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (All Non-Banking Financial Companies (NBFCs), Residuary Non-Banking Companies (RNBCs), Compliance and AML teams within NBFCs), your first concrete step on “RBI Updates AML/CFT Risks for NBFCs: Iran, DPRK & Others” is: “Update AML/CFT policies to include FATF's June 2011 list of high-risk jurisdictions.” (RBI issued this 22 Sep 2011).
Action required: Update AML/CFT policies to include FATF's June 2011 list of high-risk jurisdictions.
Action required: Conduct enhanced due diligence for any business with persons or entities from Iran, DPRK, and the newly flagged countries.
Action required: Ensure staff are trained on the updated risk assessment for these jurisdictions.
Action required: Review existing relationships with counterparties from these countries and document risk mitigation steps.
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=6728&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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