What changed
RBI issued this circular to update earlier guidance (August 2012) by incorporating FATF's latest October 2012 public statement and compliance document on AML/CFT deficiencies in certain jurisdictions. The circular explicitly extends these AML/CFT guidelines to all sub-agents of Indian Agents under MTSS, making Indian Agents solely responsible for sub-agent adherence.
What it means for you
Banks and authorised persons acting as Indian Agents under MTSS must now factor in FATF's updated list of high-risk jurisdictions when processing cross-border inward remittances. While legitimate transactions are not prohibited, enhanced due diligence and monitoring are expected. The circular reinforces that Indian Agents bear full compliance liability for their sub-agents, increasing operational and reputational risk.
What you must do
- Review FATF's October 2012 statement and compliance document for updated high-risk jurisdictions.
- Update internal AML/CFT policies and procedures for cross-border inward remittances under MTSS.
- Ensure all sub-agents are informed and comply with these guidelines; document their adherence.
- Do not block legitimate transactions but apply risk-based enhanced due diligence where warranted.
- Maintain records as per PMLA rules and FEMA provisions cited in the circular.
Who it affects
Authorised Persons (Indian Agents) under Money Transfer Service Scheme, Sub-agents of Indian Agents under MTSS, Banks handling cross-border inward remittances via MTSS
Does this circular prohibit remittances from FATF-identified jurisdictions?
No. The circular explicitly states it does not preclude legitimate transactions with those countries. However, Indian Agents must consider FATF's updated information and apply appropriate AML/CFT measures.
Who is responsible for sub-agent compliance under this circular?
Indian Agents (authorised persons) are solely responsible for ensuring their sub-agents adhere to these AML/CFT guidelines. The circular makes this responsibility explicit.
What legal backing does this circular have?
It is issued under Section 10(4) and Section 11(1) of FEMA, 1999, and under the PMLA, 2002 (as amended), along with related Prevention of Money-Laundering Rules, 2005.