What changed
The Ministry of Home Affairs has added 'Hizb-Ut-Tahrir (HuT)' and all its manifestations and front organisations to Schedule I of the UAPA, 1967, via Gazette notification S.O. 4391(E) dated October 10, 2024. RBI has now communicated this to all regulated entities, reiterating that the UAPA Order in Annex II of the Master Direction on KYC applies to such amendments.
What it means for you
Banks and other regulated entities must immediately screen their customer base and transactions for any links to Hizb-Ut-Tahrir or its front organisations. Any matching accounts or transactions must be reported to FIU-IND and the Ministry of Home Affairs as per the existing UAPA compliance framework. Failure to comply could lead to regulatory action.
What you must do
- Update your AML/KYC screening systems to include 'Hizb-Ut-Tahrir (HuT)' and all its manifestations and front organisations.
- Conduct a retrospective review of existing customers and transactions to identify any matches with the newly listed entity.
- Report any identified matches to FIU-IND and the Ministry of Home Affairs as per the procedure in Annex II of the Master Direction on KYC.
- Ensure your compliance team is aware of future amendments to Schedule I of the UAPA for immediate action.
Who it affects
All scheduled commercial banks, Non-banking financial companies (NBFCs), Payment system operators, All other regulated entities under RBI's AML/KYC framework
What is the effective date for this new listing?
The MHA gazette notification is dated October 10, 2024, and RBI's circular was issued on October 19, 2024. Compliance should be ensured immediately from the date of the circular.
Do we need to report only accounts that exactly match 'Hizb-Ut-Tahrir'?
No. The notification covers 'all its manifestations and front organisations'. You must screen for any name or entity that could be a front or manifestation of Hizb-Ut-Tahrir, using your risk-based approach.
What if we find a match after the reporting deadline?
There is no specific deadline mentioned in this circular, but the Master Direction on KYC requires immediate reporting. Delays could attract supervisory action.