Press Trust of India / Mumbai Nov 23, 2009, 21:07 IST
The Reserve Bank of India (RBI) has directed banks to keep a watch on transactions of customers with countries like Pakistan and Iran since concerns have been raised about rules there in combating terror funding.
"All banks and financial institutions are advised to take into account risks arising from the deficiencies in anti-money laundering (AML), combating of financing of terrorism (CFT) regime of Iran, Uzbekistan, Pakistan, Turkmenistan and Sao Tome and Principe," RBI said in a notification.
The notification follows concerns raised by the Financial Action Task Force (FATF), an inter-governmental body, regarding AML and CFT norms in these countries.
The body is particularly concernced by Iran's failure to address the deficiencies in its AML and CFT regime.
"The FATF remains particularly concerned about Iran's failure to address the risk of terror financing and the serious threat this poses to the integrity of the international financial system," says a statement by FATF.
As such FATF reaffirmed its call on members and urged them to advise their financial institutions to give special attention to business relationships and transactions with Iran, including Iranian companies and financial institutions.
Further, expressing concern that Pakistan's AMLO would expire on November 28, 2009, the FATF a permanent framework to combat terror funding must be put in place.
It is sad to see such alerts devoid of logic,since the banking between Iran and India is only facilitated through Asian Clearing Union in Euro currency under the Central banks of both countries only.This alert also puts on test the credibility of the Indian community resident in Iran over 100years who earn their bread and butter from Iran for maintaining their savings in India.At the 13th JBC Joint business council both sides were working for increase in further trade around USD15 Billion between both the countries and and facilitating banking which would not be possible if the Iranian companies or business community is subjected to such checks for expanding their business interests in India.
Posted by P.S.Chandhok,Honorary Delegate,The India Iran Chamber of Commerce & Industry
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