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RBI Tightens AML/CFT Checks on Cross-Border Remittances via MTSS

Current · Source: Reserve Bank of India · RBI/2011-12/508 · issued 17 Apr 2012 · ~1 min read
Quick answerRBI directs Indian Agents under MTSS to factor in FATF's February 2012 statement on AML/CFT deficiencies in certain jurisdictions when processing cross-border inward remittances. Sub-agents must also comply; Indian Agents bear full responsibility for adherence.
The rule, in the simplest words
How it plays out — a real example

A KYC & compliance officer in Indore receives a cross-border inward remittance from a customer in a country flagged by FATF. She checks the FATF February 16, 2012 statement, updates her AML/CFT screening, and ensures her sub-agent in a nearby town also follows the same rules, keeping records as required.

What changed

RBI issued this circular to incorporate FATF's updated February 16, 2012 statement on AML/CFT risks from jurisdictions with weak regimes. It reinforces earlier guidance from February 15, 2012, and explicitly extends compliance obligations to all sub-agents under the Money Transfer Service Scheme.

What it means for you

Indian agents under MTSS should consider the FATF February 16 2012 statement when assessing cross‑border inward remittances and ensure their sub‑agents adhere to the same AML/CFT standards, as directed by the RBI circular.

What you must do

Who it affects

Authorised Persons (Indian Agents) under the Money Transfer Service Scheme, Sub‑agents of Indian Agents under MTSS

❓ Common questions

Does this circular ban all remittances from FATF-flagged jurisdictions?

No. It advises Authorised Persons to consider the FATF statement but does not preclude legitimate transactions with those countries.

Who is responsible for sub-agent compliance?

The Indian Agent (Authorised Person) bears sole responsibility for ensuring their sub-agents adhere to these AML/CFT guidelines.

📜 Read the original circular — full text as issued by RBI
RBI/2011-12/508 A. P. (DIR Series) Circular No. 108 April 17, 2012 To, All Authorised Persons, who are Indian Agents under Money Transfer Service Scheme. Madam/ Dear Sir, Anti-Money Laundering (AML) / Combating the Financing of Terrorism (CFT) Standards - Cross Border Inward Remittance under Money Transfer Service Scheme Please refer to our A.P. (DIR Series) Circular No. 78 dated February 15, 2012 on risks arising from the deficiencies in AML/CFT regime of certain jurisdictions. 2. Financial Action Task Force (FATF) has issued a further Statement on February 16, 2012 on the subject ( copy enclosed ). 3. Authorised Persons (Indian Agents) are accordingly advised to consider the information contained in the enclosed statement. 4. This, however, does not preclude Authorised Persons (Indian Agents) from legitimate transactions with these countries and jurisdictions. 5. These guidelines would also be applicable mutatis mutandis to all Sub-Agents of the Indian Agents under MTSS and it will be the sole responsibility of the APs (Indian Agents) to ensure that their Sub-agents also adhere to these guidelines. 6. Authorised Persons (Indian Agents) may bring the contents of this circular to the notice of their constituents concerned. 7. Please advise your Principal Officer to acknowledge receipt of this circular letter. 8. 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 and are without prejudice to permission/approvals, if any, required under any other law. Yours faithfully, (Rudra Narayan Kar) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/508 · issued 17 Apr 2012. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
⚙️ Operations
  • Maintain records of transactions involving jurisdictions mentioned in the FATF statement as required under the PMLA.
📜 Compliance
  • Review FATF's February 16 2012 statement and update your AML/CFT screening procedures for cross‑border inward remittances.
  • Ensure your sub‑agents under MTSS are informed and comply with these enhanced AML/CFT guidelines.
  • Advise your Principal Officer to acknowledge receipt of this circular to RBI.
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 (Authorised Persons (Indian Agents) under the Money Transfer Service Scheme, Sub‑agents of Indian Agents under MTSS), your first concrete step on “RBI Tightens AML/CFT Checks on Cross-Border Remittances via MTSS” is: “Review FATF's February 16 2012 statement and update your AML/CFT screening procedures for cross‑border inward remittances.” (RBI issued this 17 Apr 2012).

  1. Circular: RBI/2011-12/508 -- RBI Tightens AML/CFT Checks on Cross-Border Remittances via MTSS
  2. Issued: 17 Apr 2012
  3. Action required: Review FATF's February 16 2012 statement and update your AML/CFT screening procedures for cross‑border inward remittances.
  4. Action required: Ensure your sub‑agents under MTSS are informed and comply with these enhanced AML/CFT guidelines.
  5. Action required: Maintain records of transactions involving jurisdictions mentioned in the FATF statement as required under the PMLA.
  6. Action required: Advise your Principal Officer to acknowledge receipt of this circular to RBI.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. 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.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7142&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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