What changed
RBI circular DNBS(PD).CC. No 358/03.10.42/2013-14 updates the earlier May 2013 directive with the UN Security Council's 1267/1989 Committee's August 6, 2013 changes to the Al-Qaida Sanctions List. NBFCs must now use this updated list for customer screening.
What it means for you
NBFCs must immediately incorporate the revised UN sanctions list into their account opening and monitoring processes. Failure to screen against this list could lead to regulatory action under UAPA, 1967. This reinforces the need for robust AML/KYC frameworks.
What you must do
- Download the updated Al-Qaida Sanctions List from the UN website URLs provided in the circular.
- Screen all new account applications against the updated list before opening accounts.
- Review all existing customer accounts to identify any matches with the updated list.
- Report any matches to the RBI and relevant authorities as per UAPA guidelines.
- Update internal compliance systems and train staff on the latest sanctions list.
Who it affects
All Non-Banking Financial Companies (NBFCs), Residuary Non-Banking Companies (RNBCs), Compliance and AML/KYC teams at NBFCs
What is the source of the updated sanctions list?
The list is from the UN Security Council's 1267/1989 Committee, updated as of August 6, 2013, and available on the UN website at the URLs given in the circular.
Do we need to screen only new accounts or existing ones too?
Both. The circular requires NBFCs to check new accounts before opening and also scan all existing accounts to ensure no account is linked to listed individuals or entities.
What happens if we find a match in an existing account?
You must follow the procedures under Section 51-A of UAPA, 1967, which typically involves freezing the account and reporting to the RBI and other authorities.