What changed
FATF issued a statement on June 25, 2010, naming jurisdictions with strategic AML/CFT deficiencies and calling for action plan implementation. RBI now requires all NBFCs and RNBCs to consider this FATF information in their KYC/AML/CFT compliance frameworks.
What it means for you
NBFCs and RNBCs must integrate the FATF-identified jurisdictions into their risk assessment and enhanced due diligence procedures. This circular reinforces that ignoring FATF alerts could expose lenders to regulatory action and reputational risk. Compliance officers must formally acknowledge receipt to their regional DNBS office.
What you must do
- Obtain and review the enclosed FATF statement dated June 25, 2010, listing deficient jurisdictions.
- Update your KYC/AML/CFT policies to incorporate enhanced screening for customers or transactions linked to those jurisdictions.
- Ensure your compliance officer or principal officer submits an acknowledged receipt of this circular to the concerned DNBS regional office.
- Train frontline and compliance teams on the updated risk parameters arising from FATF's findings.
Who it affects
All Non-Banking Financial Companies (NBFCs), All Residuary Non-Banking Companies (RNBCs), Compliance officers and principal officers of NBFCs/RNBCs, Regional offices of the Department of Non-Banking Supervision (DNBS)
What is the FATF statement referenced in this circular?
The FATF issued a statement on June 25, 2010, identifying jurisdictions with strategic deficiencies in their AML/CFT regimes. The statement calls on those jurisdictions to complete action plans within a set timeframe and advises members to consider the information.
Do we need to submit any proof of compliance to RBI?
Yes. The circular requires the compliance officer or principal officer of each NBFC/RNBC to submit an acknowledged receipt of this circular to the concerned regional office of DNBS.
Does this circular apply to all NBFCs or only certain categories?
It applies to all Non-Banking Financial Companies and all Residuary Non-Banking Companies, as addressed in the circular.