What changed
RBI issued a circular on June 23, 2022, referencing a MHA Gazette notification that added 7 individuals to Schedule IV of UAPA, 1967. Regulated entities must now treat these individuals as designated terrorists and follow the KYC Master Direction's freezing and reporting obligations.
What it means for you
Banks and other regulated entities must immediately screen their customer databases against these 7 names and freeze any accounts or assets linked to them. Failure to comply with the UAPA order and KYC Master Direction could lead to regulatory action. This is a standard but critical update to the terrorist financing watchlist.
What you must do
- Update your AML/KYC systems with the 7 new entries from the MHA Gazette notification (S.O. 1729(E) to 1876(E)).
- Screen existing and new customers against this updated list and freeze any matching accounts or transactions.
- Ensure strict adherence to the procedure laid down in Section 53 of the KYC Master Direction dated Feb 25, 2016 (as amended).
- Report any matches to the Financial Intelligence Unit (FIU-IND) and other designated authorities as per UAPA guidelines.
- Monitor future amendments to Schedule IV of UAPA and update your systems promptly.
Who it affects
All scheduled commercial banks, All non-banking financial companies (NBFCs), All payment system operators, All other regulated entities under RBI's purview
What is the legal basis for this circular?
It is issued under Section 35(1)(a) of the Unlawful Activities (Prevention) Act, 1967, and references Section 53 of RBI's Master Direction on KYC dated February 25, 2016 (as amended).
How many individuals are added and what are their names?
Seven individuals are added: Hafiz Talha Saeed, Mohiuddin Aurangzeb Alamgir, Ali Kashif Jan, Mushtaq Ahmed Zargar, Ashiq Ahmed Nengroo, Sheikh Sajad, and Arjumand Gulzar Dar.
What should we do if we find a match?
Immediately freeze the account/asset, file a Suspicious Transaction Report (STR) with FIU-IND, and follow the procedure in Section 53 of the KYC Master Direction.