What changed
FATF revised its public statement and ongoing compliance document on June 22, 2012, listing jurisdictions with strategic AML/CFT deficiencies. RBI now requires all scheduled commercial banks and financial institutions to factor this updated information into their risk management frameworks.
What it means for you
Banks should update their AML/CFT policies to reflect FATF's latest findings on high-risk jurisdictions. This does not ban transactions but advises consideration of the information for risk assessment. Lenders should ensure their compliance teams are aware of the revised FATF statements.
What you must do
- Review the enclosed FATF statement and consider the information for your AML/CFT risk assessment.
- Instruct your Principal Officer to acknowledge receipt of this circular to RBI.
- Continue legitimate trade and business with those countries without prejudice.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Local Area Banks, All India Financial Institutions
Does this circular prohibit transactions with FATF-identified jurisdictions?
No. RBI explicitly states that this does not preclude legitimate trade and business transactions with those countries.
What should banks do with the FATF statement?
Banks must consider the information in the updated FATF statement for their AML/CFT compliance and risk assessment processes.