What changed
FATF updated its statement on February 16, 2012, regarding AML/CFT risks from jurisdictions with deficiencies. RBI now advises NBFCs/RNBCs to consider this updated information in their compliance processes, referencing a prior circular from March 14, 2012.
What it means for you
NBFCs must stay alert to FATF-identified high-risk jurisdictions to avoid AML/CFT lapses. However, the circular explicitly allows continued legitimate business with these countries, so lenders need not halt all transactions but should enhance due diligence.
What you must do
- Review the enclosed FATF statement and update your AML/CFT risk assessment frameworks accordingly.
- Ensure your compliance team monitors transactions with FATF-listed jurisdictions for suspicious activity.
- Document enhanced due diligence measures for clients or transactions linked to these jurisdictions.
Who it affects
All Non-Banking Financial Companies (NBFCs), Residuary Non-Banking Companies (RNBCs)
Does this circular ban business with FATF-listed jurisdictions?
No. The circular explicitly states it does not preclude legitimate trade and business transactions with those countries and jurisdictions.
What should NBFCs do with the FATF statement?
NBFCs must consider the information in the updated FATF statement when assessing AML/CFT risks and apply appropriate due diligence measures.