RBI Reinforces FATF (Financial Action Task Force) Rules: Strengthen Due-Diligence, Keep Humanitarian & Legal Flows Moving
SDG 16: Peace, Justice and Strong Institutions | SDG 17: Partnerships for the Goals
Institutions: Reserve Bank of India | Ministry of Finance
The Reserve Bank of India (RBI) has issued a regulatory advisory following the FATF Plenary (Oct 22-24, 2025) to update supervised entities on jurisdictions with strategic deficiencies in anti-money laundering (AML), counter-terrorism financing (CTF) and proliferation-financing controls. FATF (Financial Action Task Force) is the international body that monitors whether countries are doing enough to stop money laundering, terror financing, and illegal financial flows.
According to FATF, North Korea and Iran remain in the highest-risk category for global finance. Myanmar also stays on the “call-for-action” list, meaning banks must apply extra checks when dealing with transactions linked to Myanmar. However, FATF has clearly said that humanitarian funds, legitimate charity work, and remittances must not be blocked, even when enhanced scrutiny is required.
FATF also reviews countries that are improving their systems. After its latest review, Burkina Faso, Mozambique, Nigeria, and South Africa have been removed from the “increased monitoring” (grey list). Other countries remain under watch until they complete their agreed reform plans.
RBI has reminded banks and regulated entities to use a risk-based approach — meaning they must do stricter checks only where there is higher risk, without stopping lawful cross-border business, remittances, or aid.
The advisory reinforces India’s commitment to global AML/CTF frameworks and safeguards the integrity of the financial system, supporting FATF standards, India’s AML architecture under the PMLA, and financial-sector resilience. It also ensures clarity for banks and financial institutions to calibrate due diligence without disrupting humanitarian flows or legitimate trade.
What is FATF?→ The Financial Action Task Force is an inter-governmental body established in 1989 to set and monitor global standards to combat money laundering, terrorist financing and proliferation financing. Its Plenary meets thrice a year to review country compliance and issue risk advisories.
Follow the full update here: Reserve Bank of India Press Release