RBI cautions NBFCs on transaction in Iran, Pakistan, North Korea
Mumbai: The Reserve Bank of India (RBI) has directed Non-Banking Financial Companies (NBFCs) to be alert while transacting business from countries like Iran, Pakistan and North Korea. According to the
RBI, the Financial Action Task Force (FATF), an international agency, has identified
these countries as having lax anti money laundering and terror financing laws.
The FATF was set up by the G-7 summit in Paris. The FATF aims at generating necessary
political will to bring about national legislative and regulatory reforms to combat
money laundering. In a notification, the RBI said all NBFCs are accordingly advised
to take into account risks arising from deficiencies in combating of financing
of terrorism regime of these countries. Earlier in the week, New Delhi had informed
Islamabad that it is seeking membership of the FATF as it would strengthen the
nation's capacity to track terror funding from across the borders.
