RBI circular alerts financial institutions to a new terrorist organisation designated under the Unlawful Activities (Prevention) Act, mandating compliance with asset-freezing obligations.
New Terrorist Organisation Designated Under UAPA
The Reserve Bank of India has issued a directive to all regulated financial entities—包括 commercial banks, NBFCs, and cooperative banks—advising them of the designation of a new terrorist organisation under clause (a) of sub-section (1) of Section 35 of the Unlawful Activities (Prevention) Act, 1967 (UAPA). The organisation has been added to the First Schedule of the Act, effective September 24, 2026.
Under this designation, all funds, financial assets, and economic resources belonging to or associated with the entity are required to be frozen immediately. Financial institutions must ensure strict compliance with reporting and freezing obligations under RBI’s anti-money laundering (AML) framework and the Prevention of Money Laundering Act, 2002.
Practitioners in banking and compliance must update their screening systems to include this designation. This is a routine but critical enforcement step under India’s counter-terrorism financing regime, and non-compliance may attract penalties under AML regulations.
Citations
- Unlawful Activities (Prevention) Act, 1967, Section 35(1)(a)