RBI Updates NBFCs on FATF AML/CFT Jurisdiction Risks
Current · Source: Reserve Bank of India · RBI/2012-13/478 · issued 18 Apr 2013 · ~1 min read
Quick answerRBI directs all NBFCs to review FATF's updated February 2013 statement on AML/CFT compliance gaps in certain jurisdictions. This does not ban legitimate trade but requires heightened due diligence.
The rule, in the simplest words
Read the FATF update from 22 Feb 2013 and change your AML/CFT rules to match it (AML = stopping dirty money, CFT = stopping money for terror).
When a deal involves a country on the FATF high‑risk list, do extra checks and keep a record, but you can still do normal business.
Your compliance or risk team must look at the risk of each cross‑border transaction and report any suspicious activity.
How it plays out — a real example
Rohit, a senior credit officer at a Mumbai NBFC, opens the FATF February 2013 statement, adds a quick extra‑check step for any client dealing with a listed high‑risk country, writes down what he verified, and then happily approves the loan after the added monitoring.
What changed
RBI issued a circular on April 18, 2013, referencing FATF's February 22, 2013 update on high-risk and non-cooperative jurisdictions. NBFCs must now consider this updated FATF statement in their AML/CFT processes.
What it means for you
NBFCs must incorporate the latest FATF guidance into their risk assessment frameworks for cross-border transactions. While legitimate business continues, lenders face increased scrutiny on transactions with flagged jurisdictions, requiring enhanced monitoring and reporting.
What you must do
Review the enclosed FATF statement and update your AML/CFT policies accordingly.
Ensure your compliance team assesses risks from transactions with listed jurisdictions.
Maintain records of due diligence for transactions with high-risk countries.
Do not halt legitimate trade but apply enhanced monitoring where needed.
Who it affects
All Non-Banking Financial Companies (excluding Residuary Non-Banking Companies), Compliance and risk management teams at NBFCs, NBFCs engaged in cross-border transactions
❓ Common questions
Does this circular ban transactions with the listed jurisdictions?
No, the circular explicitly states it does not preclude NBFCs from legitimate trade and business transactions with these countries.
What is the source of the updated guidance?
The Financial Action Task Force (FATF) issued an updated statement on February 22, 2013, which RBI has enclosed for NBFCs to consider.
Which NBFCs are covered by this circular?
All Non-Banking Financial Companies are covered, except Residuary Non-Banking Companies.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/478
DNBS(PD).CC.No 323/03.10.42/2012-13
April 18, 2013
All Non Banking Financial Companies excluding
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.319/03.10.42/ 2012-13 dated December 28, 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 February 22, 2013 on the captioned subject and document ‘Improving Global AML/CFT Compliance: On-Going Process’ ( copy enclosed ). The statement /document can be accessed from the following URL also:
http://www.fatf-gafi.org/documents/documents/fatfpublicstatement22february2013.html and
http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/improvingglobalamlcftcomplianceon-goingprocess-22february2013.html
3. All NBFCs are accordingly advised to consider the information contained in the enclosed statement. This, however, does not preclude NBFCs from legitimate trade and business transactions with these countries and jurisdictions.
Yours faithfully,
(Sindhu Pancholy)
Deputy General Manager
Encl: as above
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/478 · issued 18 Apr 2013. The plain-English explanation above is BankPulse’s own independent summary.
Maintain records of due diligence for transactions with high-risk countries.
📜 Compliance
Review the enclosed FATF statement and update your AML/CFT policies accordingly.
Ensure your compliance team assesses risks from transactions with listed jurisdictions.
Do not halt legitimate trade but apply enhanced monitoring where needed.
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 (excluding Residuary Non-Banking Companies), Compliance and risk management teams at NBFCs, NBFCs engaged in cross-border transactions), your first concrete step on “RBI Updates NBFCs on FATF AML/CFT Jurisdiction Risks” is: “Review the enclosed FATF statement and update your AML/CFT policies accordingly.” (RBI issued this 18 Apr 2013).
Action required: Review the enclosed FATF statement and update your AML/CFT policies accordingly.
Action required: Ensure your compliance team assesses risks from transactions with listed jurisdictions.
Action required: Maintain records of due diligence for transactions with high-risk countries.
Action required: Do not halt legitimate trade but apply enhanced monitoring where needed.
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=7946&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.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.