What changed
FATF updated its public statement and compliance document on June 21, 2013, listing jurisdictions with weak AML/CFT regimes. RBI has forwarded this update to all scheduled commercial banks (excluding RRBs), local area banks, and all India financial institutions, replacing the earlier March 2013 guidance.
What it means for you
Banks must factor in the updated FATF list when assessing customer and transaction risks from those jurisdictions. While legitimate business is not prohibited, lenders need to apply enhanced due diligence and monitor for potential money‑laundering or terrorist‑financing links.
What you must do
- Review the enclosed FATF statement and update your AML/CFT risk assessment accordingly.
- Instruct your Principal Officer to acknowledge receipt of this circular to RBI.
- Ensure your compliance team is aware of the updated high-risk jurisdictions and applies enhanced due diligence where needed.
- Do not restrict legitimate trade transactions solely based on this circular, but maintain appropriate monitoring.
Who it affects
Scheduled Commercial Banks (excluding RRBs), Local Area Banks, All India Financial Institutions, Principal Officers responsible for AML/CFT compliance
Does this circular ban transactions with the listed jurisdictions?
No. The circular explicitly states it does not preclude Indian banks from legitimate trade and business with those countries. However, banks must consider the FATF information and apply enhanced due diligence.
What should our Principal Officer do after receiving this circular?
The Principal Officer must acknowledge receipt of the circular to RBI, as advised in paragraph 4 of the letter. They should also ensure the updated FATF statement is incorporated into the bank's AML/CFT procedures.