What changed
FATF updated its public statement on February 16, 2012, regarding jurisdictions with strategic AML/CFT deficiencies. RBI has forwarded this update to all Regional Rural Banks and State/Central Co-operative Banks, replacing the earlier January 2012 advisory.
What it means for you
Banks must incorporate the latest FATF findings into their risk assessment and customer due diligence frameworks. While legitimate transactions remain unaffected, enhanced scrutiny may be needed for dealings with listed jurisdictions. Non-compliance could expose banks to regulatory and reputational risks.
What you must do
- Review the enclosed FATF statement and update your AML/CFT risk assessment accordingly.
- Ensure your Principal Officer acknowledges receipt of this circular to the concerned RBI Regional Office.
- Advise relevant business and compliance teams to factor the updated list into transaction monitoring and KYC processes.
- Do not disrupt legitimate trade and business transactions with the listed jurisdictions unless specific red flags emerge.
Who it affects
Regional Rural Banks (RRBs), State Co-operative Banks (StCBs), Central Co-operative Banks (DCCBs), Principal Officers of these banks
Does this circular prohibit transactions with the listed jurisdictions?
No. The circular explicitly states that it does not preclude Indian banks from legitimate trade and business transactions with those countries. However, banks must consider the FATF-identified risks in their AML/CFT processes.
What action is required from the Principal Officer?
The Principal Officer must acknowledge receipt of this circular to the concerned RBI Regional Office, as per paragraph 5 of the circular.