What changed
FATF issued a statement on June 25, 2010 identifying jurisdictions with strategic AML/CFT deficiencies and called for action plan implementation. RBI now requires all AD I category UCBs to consider this FATF statement in their KYC/AML/CFT compliance. This supplements the earlier circular of August 12, 2010.
What it means for you
UCBs must update their customer due diligence and transaction monitoring to account for risks from these FATF-flagged jurisdictions. Non-compliance could expose the bank to regulatory action and reputational risk. The Compliance Officer must formally acknowledge receipt, ensuring accountability.
What you must do
- Review the enclosed FATF statement and identify any flagged jurisdictions relevant to your customer base or transactions.
- Update your KYC/AML/CFT policies and procedures to incorporate enhanced due diligence for those jurisdictions.
- Ensure the Compliance Officer/Principal Officer acknowledges receipt of this circular to the respective RBI Regional Office.
- Train staff on the updated AML/CFT requirements and the implications of the FATF statement.
Who it affects
All AD I Category Urban Co-operative Banks, Compliance Officers / Principal Officers of these UCBs, KYC/AML operations teams
What is the FATF statement referenced in this circular?
The FATF statement dated June 25, 2010 lists jurisdictions with strategic AML/CFT deficiencies and calls for action plan implementation. The circular encloses a copy for banks to consider.
Do I need to take any action beyond acknowledging receipt?
Yes. You must consider the information in the FATF statement and integrate it into your KYC/AML/CFT processes. Acknowledging receipt to the Regional Office is a mandatory procedural step.
Which banks are covered by this circular?
All AD I Category Urban Co-operative Banks, as listed in the circular (e.g., Abhyudaya, Bharat, Cosmos, Saraswat, etc.).