RBI asks REs to conduct internal risk assessments for terror financing

The Reserve Bank of India (RBI) has issued new guidelines for banks, NBFCs, and regulated entities to enhance their risk assessment for money laundering, terrorist financing, and proliferation financing. The guidelines emphasize the use of information from various sources to properly mitigate risks associated with clients, countries, products, services, transactions, or delivery channels. The RBI’s directive highlights the importance of conducting internal risk assessments (IRA) to understand vulnerabilities and allocate resources effectively. The guidelines also stress the need for a comprehensive approach involving multiple departments within the organization to ensure robust risk management. This initiative aims to strengthen the financial system’s resilience against financial crimes and enhance the overall security of banking operations.