What changed
FATF updated its public statement and compliance document on October 19, 2012, and February 22, 2013, regarding high-risk and non-cooperative jurisdictions. RBI now requires UCBs to factor these updates into their AML/CFT risk assessments.
What it means for you
UCBs must stay current with FATF's evolving list of jurisdictions with AML/CFT deficiencies to manage correspondent banking and cross-border risks. The circular does not prohibit legitimate transactions but expects enhanced due diligence where needed. Principal Officers must confirm receipt to the regional RBI office.
What you must do
- Review FATF statements from October 2012 and February 2013 for updated high-risk jurisdictions.
- Update internal AML/CFT policies and risk assessments based on FATF's latest findings.
- Ensure Principal Officer acknowledges receipt of this circular to the concerned RBI Regional Office.
- Do not restrict legitimate trade and business with listed countries; apply risk-based measures instead.
Who it affects
All AD Category I Primary (Urban) Co-operative Banks, Principal Officers of UCBs, AML/CFT compliance teams at UCBs
Does this circular ban transactions with FATF-listed jurisdictions?
No. The circular explicitly states it does not preclude UCBs from legitimate trade and business with those countries. Banks should apply risk-based due diligence, not a blanket ban.
What must the Principal Officer do after receiving this circular?
The Principal Officer must acknowledge receipt of this circular to the relevant RBI Regional Office, as per paragraph 4 of the circular.