The Reserve Bank of India (RBI) has released the ‘Internal Risk Assessment Guidance for Money Laundering/Terrorist Financing Risks’ for its regulated entities ( REs ). The guidance, now available on the RBI’s official website.
In line with the RBI’s Master Direction on Know Your Customer (KYC) issued on February 25, 2016, and its subsequent amendments, REs are required to periodically assess risks related to money laundering, terrorist financing, and proliferation financing (PF).
This assessment covers clients, countries, products, services, transactions, and delivery channels, among other factors. The goal is to help REs identify, assess, and mitigate risks in these areas to prevent financial crimes.
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The newly issued Guidance Note is designed to assist REs, particularly frontline staff and practitioners involved in AML/CFT/CPF compliance. It provides key principles and methodologies to support the implementation of effective risk management systems. By following this guidance, REs will enhance their ability to detect and deter money laundering, terrorist financing, and proliferation financing.
While the guidance outlines certain systems, procedures, and tools for risk assessment, it is advisory in nature and must be used alongside the RBI’s existing instructions. In case of any inconsistency, the RBI’s official directives will take precedence.
This guidance document is intended for all regulated entities (REs) under the Reserve Bank of India, including banks, NBFCs, Authorised Persons, and Payment System Operators. It aims to support REs in their risk assessment and compliance efforts, while also helping them develop their own internal Risk-Based Approach (RBA) by outlining broad principles and methodologies.
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Senior management and employees involved in conducting internal assessments of money laundering (ML) and terrorist financing (TF) risks within their organisations can refer to this document as a resource.
You may access the same here.
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