What changed
FATF updated its public statement and compliance document on June 22, 2012, listing jurisdictions with AML/CFT deficiencies. RBI's July 2012 circular asks RRBs and co-operative banks to factor this update into their risk assessments, replacing the earlier March 2012 guidance.
What it means for you
Banks must align their AML/CFT screening with FATF's latest list of non-cooperative jurisdictions. While legitimate business is not barred, enhanced due diligence may be needed for transactions involving these countries. Non-compliance could expose banks to regulatory scrutiny.
What you must do
- Review FATF's June 22, 2012 statement and incorporate it into your AML/CFT risk framework.
- Ensure your principal officer acknowledges receipt of this circular to the concerned RBI regional office.
- Update transaction monitoring systems to flag dealings with newly listed high-risk jurisdictions.
- Train staff on enhanced due diligence for customers or transactions linked to these jurisdictions.
Who it affects
All Regional Rural Banks (RRBs), State Co-operative Banks, Central Co-operative Banks, Principal Officers of these banks
Does this circular ban transactions with the listed jurisdictions?
No. The circular explicitly states it does not preclude legitimate trade and business transactions with these countries. However, banks must apply enhanced scrutiny based on FATF's updated guidance.
What should the principal officer do after receiving this circular?
The principal officer must acknowledge receipt of the circular letter to the concerned RBI regional office, as advised in paragraph 5 of the circular.
Where can we access the updated FATF statement?
The statement is available at the URLs provided in the circular: http://www.fatf-gafi.org/documents/repository/fatfpublicstatement-22june2012.html and the related compliance document link.