What changed
FATF updated its statement on October 28, 2011, regarding jurisdictions with weak AML/CFT regimes. RBI now asks all scheduled commercial banks and financial institutions to factor this update into their risk assessments.
What it means for you
Banks must incorporate the latest FATF findings into their AML/CFT due diligence processes. While legitimate transactions remain unaffected, enhanced scrutiny on dealings with flagged jurisdictions is expected. This reinforces India's commitment to global financial integrity standards.
What you must do
- Review the enclosed FATF statement and update your AML/CFT risk assessment accordingly.
- Ensure your Principal Officer acknowledges receipt of this circular.
- Advise relevant staff to apply enhanced due diligence for transactions involving listed jurisdictions.
- Maintain records of compliance actions taken in response to this advisory.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Local Area Banks, All India Financial Institutions
Does this circular prohibit business with the listed jurisdictions?
No. The circular explicitly states it does not preclude legitimate trade and business transactions with those countries.
What should our Principal Officer do?
The Principal Officer must acknowledge receipt of this circular letter to RBI, as advised in paragraph 5.
Is this a new requirement or an update?
This is an update to earlier RBI letters from July 2011, incorporating FATF's latest statement from October 2011.