Updated FATF AML/CFT Guidance for MTSS Cross-Border Remittances
Current · Source: Reserve Bank of India · RBI/2012-13/372 · issued 10 Jan 2013 · ~2 min read
Quick answerRBI directs Indian Agents under MTSS to consider FATF's updated October 2012 AML/CFT statement for cross-border inward remittances, without blocking legitimate transactions. Sub-agents must also comply, with Indian Agents fully responsible.
The rule, in the simplest words
Indian Agents (banks or companies that send money from abroad to India) must check FATF's updated October 2012 list of risky countries before allowing money transfers into India.
Do not stop normal, legal money transfers—just be extra careful and check more closely when money comes from a risky country.
Sub-agents (helpers of Indian Agents) must also follow these rules, and the Indian Agent is fully responsible if the sub-agent does not follow them.
Keep records of all transactions as required by PMLA (law against money laundering) and FEMA (foreign exchange rules).
How it plays out — a real example
A KYC & compliance officer in Indore receives a cross-border remittance from a country on FATF's updated high-risk list. She does not block the transaction but asks for extra documents to confirm the sender's identity and the reason for the transfer, following the Indian Agent's updated AML policy. She also notes that her branch's sub-agent must follow the same rules, and she reports compliance to the head office.
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
❓ Common questions
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.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/372
A.P. (DIR Series) Circular No. 71
January 10, 2013
To
All Authorised Persons, who are Indian Agents under Money Transfer Service Scheme.
Madam/ Dear Sir,
Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT) Standards - Cross Border Inward Remittance under Money Transfer Service Scheme
Please refer to our A.P.(DIR Series) Circular No. 18 dated August 23, 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 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 (Indian Agents) are accordingly advised to consider the information contained in the enclosed statement.
4. This, however, does not preclude Authorised Persons (Indian Agents) from legitimate transactions with these countries and jurisdictions.
5. These guidelines would also be applicable mutatis mutandis to all Sub-Agents of the Indian Agents under MTSS and it will be the sole responsibility of the APs (Indian Agents) to ensure that their Sub-agents also adhere to these guidelines.
6. Authorised Persons (Indian Agents) 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/2012-13/372 · issued 10 Jan 2013. The plain-English explanation above is BankPulse’s own independent summary.
Maintain records as per PMLA rules and FEMA provisions cited in the circular.
📜 Compliance
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.
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 (Authorised Persons (Indian Agents) under Money Transfer Service Scheme, Sub-agents of Indian Agents under MTSS, Banks handling cross-border inward remittances via MTSS), your first concrete step on “Updated FATF AML/CFT Guidance for MTSS Cross-Border Remittances” is: “Review FATF's October 2012 statement and compliance document for updated high-risk jurisdictions.” (RBI issued this 10 Jan 2013).
Action required: Review FATF's October 2012 statement and compliance document for updated high-risk jurisdictions.
Action required: Update internal AML/CFT policies and procedures for cross-border inward remittances under MTSS.
Action required: Ensure all sub-agents are informed and comply with these guidelines; document their adherence.
Action required: Do not block legitimate transactions but apply risk-based enhanced due diligence where warranted.
Action required: Maintain records as per PMLA rules and FEMA provisions cited in the circular.
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=7799&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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