Current · Source: Reserve Bank of India · RBI/2012-13/353 · issued 28 Dec 2012 · ~1 min read
Quick answerRBI directs NBFCs/RNBCs to review FATF's October 2012 updated statement on AML/CFT deficiencies in certain jurisdictions. Firms must factor this into risk assessments but can continue legitimate trade with those countries.
The rule, in the simplest words
NBFCs (companies that give loans but are not banks) and RNBCs (a special type of NBFC) must check the FATF (a global group that fights money laundering) statement from October 19, 2012, which lists countries with weak rules against money laundering and terrorism financing.
Use the FATF list to update your risk checks for customers or deals from those countries, but you can still do normal business with them.
If you do business with those countries, you must watch transactions more carefully and keep records of your checks.
How it plays out — a real example
A KYC & compliance officer in Indore receives a loan application from a customer who recently moved from a country on the FATF list. She reviews the updated FATF statement, flags the application for extra checks, and asks for more documents to prove the source of the gold. She approves the loan only after confirming the funds are clean, keeping a note of her checks for the regulator.
What changed
RBI issued a circular referencing FATF's October 19, 2012 updated statement on AML/CFT compliance gaps in specific jurisdictions. This supersedes the earlier September 17, 2012 guidance. NBFCs/RNBCs are now required to consider the latest FATF information in their operations.
What it means for you
NBFCs must update their AML/CFT risk frameworks to reflect FATF's latest findings on high-risk jurisdictions. While legitimate business is not barred, enhanced due diligence may be needed for transactions involving these countries. Non-compliance could expose firms to regulatory scrutiny.
What you must do
Access and review the enclosed FATF statement dated October 19, 2012 from the provided URLs.
Update your AML/CFT policies to incorporate the updated list of jurisdictions with deficiencies.
Ensure transaction monitoring systems flag dealings with identified high-risk jurisdictions.
Document risk assessments and due diligence measures for any continued business with these countries.
Who it affects
All Non-Banking Financial Companies (NBFCs), Residuary Non-Banking Companies (RNBCs)
❓ Common questions
Does this circular prohibit all transactions with the listed jurisdictions?
No. The circular explicitly states it does not preclude legitimate trade and business transactions with those countries. However, NBFCs must consider the FATF statement and apply appropriate risk mitigation.
Where can I find the FATF statement referenced in the circular?
The statement is enclosed with the circular and can also be accessed at the FATF website URLs provided in the RBI notification: http://www.fatf-gafi.org/media/fatf/documents/FATF%20Public%20Statement%2019%20October%202012.pdf and the related compliance page.
What should I do if my NBFC already has dealings with a jurisdiction on the updated list?
You should reassess the AML/CFT risks associated with that jurisdiction using the latest FATF information, enhance due diligence as needed, and document your compliance measures. Continue monitoring for any further updates.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/353
DNBS (PD).CC. No 319/03.10.42/2012-13
December 28, 2012
All Non Banking Financial Companies /
Residuary Non Banking Companies
Dear Sir/Madam,
Anti-Money Laundering (AML)/Combating of Financing of Terrorism (CFT) - Standards
Please refer to DNBS (PD).CC.No.304/03.10.42/2011-12 dated September 17, 2012 on risks arising from the deficiencies in AML/CFT regime of certain jurisdictions.
2. Financial Action Task Force (FATF) has updated its Statement on October 19, 2012 on the subject ( copy enclosed ). The statement /document can be accessed from the following URL also:
http://www.fatf-gafi.org/media/fatf/documents/FATF%20Public%20Statement%2019%20October%202012.pdf and
http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/improvingglobalamlcftcomplianceongoingprocess-19october2012.html
3. All NBFCs/RNBCs are accordingly advised to consider the information contained in the enclosed statement.
4. This, however, does not preclude NBFCs from legitimate trade and business transactions with these countries and jurisdictions.
Yours faithfully,
(Chandana Dasgupta)
Deputy General Manager
Encl: as above
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/353 · issued 28 Dec 2012. The plain-English explanation above is BankPulse’s own independent summary.
Ensure transaction monitoring systems flag dealings with identified high-risk jurisdictions.
📜 Compliance
Access and review the enclosed FATF statement dated October 19, 2012 from the provided URLs.
Update your AML/CFT policies to incorporate the updated list of jurisdictions with deficiencies.
Document risk assessments and due diligence measures for any continued business with these countries.
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 (All Non-Banking Financial Companies (NBFCs), Residuary Non-Banking Companies (RNBCs)), your first concrete step on “RBI Updates NBFCs on FATF AML/CFT Jurisdiction Risks (October 19, 2012)” is: “Access and review the enclosed FATF statement dated October 19, 2012 from the provided URLs.” (RBI issued this 28 Dec 2012).
Action required: Access and review the enclosed FATF statement dated October 19, 2012 from the provided URLs.
Action required: Update your AML/CFT policies to incorporate the updated list of jurisdictions with deficiencies.
Action required: Ensure transaction monitoring systems flag dealings with identified high-risk jurisdictions.
Action required: Document risk assessments and due diligence measures for any continued business with these countries.
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=7780&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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