What changed
FATF issued an updated public statement and compliance document on October 19, 2012, replacing its earlier version. RBI now asks all RRBs and state/central cooperative banks to factor this new information into their AML/CFT risk assessments.
What it means for you
Banks must align their customer due diligence and transaction monitoring with the latest FATF-identified jurisdictions having strategic AML/CFT deficiencies. However, this does not ban business with those countries—only requires enhanced vigilance. The circular reinforces that compliance gaps in certain jurisdictions pose risks that banks need to proactively manage.
What you must do
- Download and review the enclosed FATF statement and the 'Improving Global AML/CFT Compliance' document from the provided URLs.
- Update your bank's AML/CFT risk assessment and policies to reflect the October 2012 FATF updates on high-risk jurisdictions.
- Ensure your Principal Officer acknowledges receipt of this circular to the respective RBI Regional Office.
- Communicate the updated FATF guidance to relevant compliance and operations teams.
Who it affects
Regional Rural Banks (RRBs), State Co-operative Banks (StCBs), Central Co-operative Banks (DCCBs), Principal Officers of these banks
Does this circular prohibit transactions with countries listed by FATF?
No. The circular explicitly states that it does not preclude Indian banks from legitimate trade and business with those jurisdictions. However, enhanced due diligence is expected.
What should our Principal Officer do after receiving this circular?
The Principal Officer must acknowledge receipt of this circular to the concerned RBI Regional Office, as directed in paragraph 5 of the circular.
Where can we access the updated FATF statement?
The circular provides two URLs: one for the FATF Public Statement dated October 19, 2012, and another for the ongoing compliance document. Both are hosted on the FATF website.