RBI Updates AML/CFT Guidance on High-Risk Jurisdictions
Current · Source: Reserve Bank of India · RBI/2012-13/371 · issued 10 Jan 2013 · ~1 min read
Quick answerRBI directs authorised persons to factor in FATF's October 2012 updated statement on AML/CFT compliance deficiencies in certain jurisdictions, while not banning legitimate transactions. Agents and franchisees must also follow these guidelines.
The rule, in the simplest words
Banks must check the FATF (a global group that fights money laundering) updated list from October 2012 to see which countries have weak rules against money laundering and terrorism funding.
Banks can still do business with those countries, but they must be extra careful and check customers more closely.
If a bank uses agents or franchisees (like smaller offices that work for them), the bank must make sure those agents follow the same strict rules.
How it plays out — a real example
A KYC & compliance officer in Indore reviews the FATF's October 2012 list and sees Country X is flagged for weak anti-money laundering rules. When a customer from Country X applies for a gold loan, the officer does extra checks, like asking for more proof of where the money comes from, but still approves the loan because the customer's documents are clear.
What changed
RBI issued a circular on January 10, 2013, referencing FATF's updated public statement and ongoing compliance document from October 19, 2012. Authorised persons must now consider this updated information when assessing risks from jurisdictions with AML/CFT deficiencies. The earlier guidance from August 23, 2012, is superseded by this update.
What it means for you
Banks and authorised persons must incorporate the latest FATF findings into their risk assessments for cross-border transactions and customer due diligence. While legitimate business with these jurisdictions is not prohibited, enhanced scrutiny is expected. The responsibility extends to all agents and franchisees, placing the onus on franchisers to ensure compliance.
What you must do
Review FATF's October 2012 public statement and compliance document for updated high-risk jurisdictions.
Update internal AML/CFT risk assessment frameworks to reflect the latest FATF guidance.
Ensure all agents and franchisees are informed and adhere to the same AML/CFT standards.
Continue to allow legitimate transactions but apply enhanced due diligence where warranted.
Who it affects
All authorised persons (banks, money changers, etc.), Agents and franchisees of authorised persons, Compliance and AML/CFT teams
❓ Common questions
Does this circular ban transactions with high-risk jurisdictions?
No, it explicitly states that it does not preclude legitimate transactions with those countries and jurisdictions.
Who is responsible for ensuring agents and franchisees comply?
The franchiser (authorised person) bears sole responsibility for ensuring their agents and franchisees adhere to these guidelines.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/371
A.P. (DIR Series) Circular No. 70
January 10, 2013
To
All Authorised Persons
Madam/Sir,
Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT) Standards - Money changing activities
Please refer to our A.P.(DIR Series) Circular No. 17 dated August 23, 2012 on risks arising from the deficiencies in AML/CFT regime of certain jurisdiction.
2. Financial Action Task Force (FATF) has updated its Statement on the subject and document 'Improving Global AML/CFT Compliance: on-going process' on October 19, 2012 ( 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/improvingglobalamlcftcomplianceon-goingprocess-19october2012.html
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. 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/2012-13/371 · issued 10 Jan 2013. 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 (All authorised persons (banks, money changers, etc.), Agents and franchisees of authorised persons, Compliance and AML/CFT teams), your first concrete step on “RBI Updates AML/CFT Guidance on High-Risk Jurisdictions” is: “Review FATF's October 2012 public statement and compliance document for updated high-risk jurisdictions.” (RBI issued this 10 Jan 2013).
Circular: RBI/2012-13/371 -- RBI Updates AML/CFT Guidance on High-Risk Jurisdictions
Issued: 10 Jan 2013
Action required: Review FATF's October 2012 public statement and compliance document for updated high-risk jurisdictions.
Action required: Update internal AML/CFT risk assessment frameworks to reflect the latest FATF guidance.
Action required: Ensure all agents and franchisees are informed and adhere to the same AML/CFT standards.
Action required: Continue to allow legitimate transactions but apply enhanced due diligence where warranted.
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=7798&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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