RBI directs all regulated entities to comply with UAPA, 1967 after designation of a new terrorist organisation under Section 35(1)(a), requiring strict monitoring and reporting.
RBI Alerts Financial Entities on UAPA Designation
The Reserve Bank of India has issued a circular to all commercial banks, co-operative banks, NBFCs, and other regulated entities regarding the designation of a 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, triggering enhanced due diligence and reporting obligations.
Financial institutions are directed to immediately freeze any assets linked to the designated group, conduct mandatory screenings of customer databases, and report findings to the Financial Intelligence Unit (FIU-IND). The circular stresses strict compliance with anti-money laundering (AML) and counter-terrorist financing (CTF) protocols under the Prevention of Money Laundering Act, 2002.
This development mandates urgent internal audits and system updates for compliance teams. Legal advisors must ensure clients’ KYC and transaction monitoring systems are aligned with the latest UAPA schedule to mitigate regulatory and penal risks.
Citations
- UAPA, 1967, Section 35(1)(a)
