What changed
RBI circular DNBS(PD).CC No. 261/03.10.42/2011-12 dated March 20, 2012 provides updates to the Al-Qaida Sanctions List via six UN notes (dated Oct 5, Oct 17, Nov 30, Dec 13, Dec 28, Dec 30, 2011) under UNSCR 1267/1989. NBFCs must incorporate these additions into customer screening processes.
What it means for you
NBFCs must immediately update their internal sanctions lists to include the newly designated individuals and entities. Failure to screen new and existing accounts against this list could lead to violations of UAPA, 1967, attracting penalties. This reinforces the zero-tolerance approach to terrorist financing.
What you must do
- Update your internal sanctions database with the latest UN Al-Qaida list from the provided UN website link.
- Screen all new account applications against the updated list before onboarding.
- Conduct a one-time review of all existing accounts to identify any matches with the updated list.
- Report any matches to the Financial Intelligence Unit (FIU-IND) and RBI as per existing KYC/AML guidelines.
Who it affects
All Non-Banking Financial Companies (NBFCs), Residuary Non-Banking Companies (RNBCs), Compliance and AML/KYC teams at NBFCs
What is the source of the updated sanctions list?
The list is maintained by the UN Security Council's 1267/1989 Committee and is available on their official website. RBI has circulated the latest changes via this circular.
Do we need to screen only new customers or existing ones too?
Both. The circular explicitly requires NBFCs to check new accounts before opening and to scan all existing accounts to ensure no account is linked to any listed individual or entity.
What happens if we find a match in our existing accounts?
You must immediately freeze the account and report the details to the RBI and FIU-IND as per the provisions of UAPA, 1967 and existing KYC/AML directions.