Business IdeasRBI alerts banks on transactions with Iran, Pak
The Reserve Bank of India (RBI) has directed banks to keep a watch on transactions of customers with countries like Pakistan and Iran since concerns have been raised about rules there in combating terror funding.
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"All banks and financial institutions are advised to take into account risks arising from the deficiencies in anti-money laundering (AML), combating of financing of terrorism (CFT) regime of Iran, Uzbekistan, Pakistan, Turkmenistan and Sao Tome and Principe," RBI said in a notification.
The notification follows concerns raised by the Financial Action Task Force (FATF), an inter-governmental body, regarding AML and CFT norms in these countries.
The body is particularly concernced by Iran"s failure to address the deficiencies in its AML and CFT regime.
"The FATF remains particularly concerned about Iran"s failure to address the risk of terror financing and the serious threat this poses to the integrity of the international financial system," says a statement by FATF.
As such FATF reaffirmed its call on members and urged them to advise their financial institutions to give special attention to business relationships and transactions with Iran, including Iranian companies and financial institutions.
Further, expressing concern that Pakistan"s AMLO would expire on November 28, 2009, the FATF a permanent framework to combat terror funding must be put in place.