Current · Source: Reserve Bank of India · RBI/2012-13/174 · issued 23 Aug 2012 · ~1 min read
Quick answerRBI directs authorised persons to factor in FATF's June 2012 statement on AML/CFT risks from certain jurisdictions when handling money changing activities, without banning legitimate transactions.
The rule, in the simplest words
Authorised persons must consider FATF's June 2012 statement on AML/CFT risks when handling money changing activities.
Legitimate transactions with listed jurisdictions are allowed, but enhanced due diligence may be needed.
Franchisers are liable for compliance with these guidelines by their agents and franchisees.
How it plays out — a real example
Rahul, a money changer in Mumbai, needs to update his AML/CFT risk assessment using the latest FATF statement. He ensures that his agents and franchisees adhere to the guidelines, and notifies his Principal Officer to acknowledge receipt of the circular. Rahul's enhanced due diligence helps him to identify and prevent potential money laundering activities in his business.
What changed
RBI issued a circular on August 23, 2012, referencing FATF's June 22, 2012 statement on AML/CFT deficiencies in certain jurisdictions. It advises authorised persons to consider this statement in their operations, building on earlier guidance from April 2012.
What it means for you
Banks and money changers must update their AML/CFT risk assessments using the latest FATF statement. While legitimate transactions with listed jurisdictions remain allowed, enhanced due diligence may be needed. The circular also extends these requirements to agents and franchisees, making franchisers liable for compliance.
What you must do
Review FATF's June 22, 2012 statement and incorporate its findings into your AML/CFT risk framework for money changing activities.
Ensure your agents and franchisees adhere to these guidelines, with clear accountability on franchisers.
Notify your Principal Officer to acknowledge receipt of this circular and disseminate its contents to relevant constituents.
Who it affects
Authorised Persons handling money changing, Agents and franchisees of Authorised Persons, Principal Officers of Authorised Persons
❓ Common questions
Does this circular ban transactions with the jurisdictions flagged by FATF?
No, it explicitly states that legitimate transactions with those countries and jurisdictions are not precluded.
Who is responsible for ensuring agents and franchisees comply?
The franchiser (Authorised Person) bears sole responsibility for ensuring their agents and franchisees follow these AML/CFT guidelines.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/174
A. P. (DIR Series) Circular No. 17
August 23, 2012
To
All Authorised Persons
Madam / Sir,
Anti-Money Laundering (AML) / Combating the Financing of Terrorism (CFT) Standards - Money changing activities
Please refer to our A.P. (DIR Series) Circular No. 107 dated April 17, 2012 on risks arising from the deficiencies in AML/CFT regime of certain jurisdiction.
2. Financial Action Task Force (FATF) has issued a further Statement on June 22, 2012 on the subject ( copy enclosed ).
3. Authorised Persons are accordingly advised to consider the information contained in the enclosed statement.
4. This, however, does not preclude Authorised Persons from legitimate transactions with these countries and jurisdictions.
5. These guidelines are also applicable mutatis mutandis to all agents/ franchisees of Authorised Persons and it will be the sole responsibility of the franchisers to ensure that their agents / franchisees also adhere to these guidelines.
6. Authorised Persons 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/2012-13/174 · issued 23 Aug 2012. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (Authorised Persons handling money changing, Agents and franchisees of Authorised Persons, Principal Officers of Authorised Persons), your first concrete step on “RBI Updates AML/CFT Guidance for Money Changers” is: “Review FATF's June 22, 2012 statement and incorporate its findings into your AML/CFT risk framework for money changing activities.” (RBI issued this 23 Aug 2012).
Circular: RBI/2012-13/174 -- RBI Updates AML/CFT Guidance for Money Changers
Issued: 23 Aug 2012
Action required: Review FATF's June 22, 2012 statement and incorporate its findings into your AML/CFT risk framework for money changing activities.
Action required: Ensure your agents and franchisees adhere to these guidelines, with clear accountability on franchisers.
Action required: Notify your Principal Officer to acknowledge receipt of this circular and disseminate its contents to relevant constituents.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
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.
💬 Banker Discussion
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=7521&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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