Designation of terrorist organisation under clause (a) of sub-section (1) of section 35 of the Unlawful Activities (Prevention) Act, 1967 and listed in the Firs

The Reserve Bank of India (RBI) issued a directive on February 2, 2021, mandating all regulated financial entities—including banks, NBFCs, and co-operative banks—to comply with the Unlawful Activities (Prevention) Act, 1967 (UAPA). The order requires entities to follow procedures outlined in the UAPA notification, ensuring meticulous adherence to government directives regarding designated terrorist organizations. Entities must report accounts linked to listed individuals or entities to the Financial Intelligence Unit-India (FIU-IND) and the Ministry of Home Affairs (MHA).

The RBI reiterated that the UAPA Order applies not only to existing listings but also to future amendments in Schedule I and IV of the UAPA, 1967. This includes updates to the First Schedule, which lists designated terrorist organizations. Regulated entities were advised to monitor these amendments for immediate compliance. The directive aligns with Chapter IX of the RBI’s Know Your Customer Directions, 2025, as amended on September 18, 2026.

On September 16, 2026, the Ministry of Home Affairs (MHA) issued a notification declaring a new entity as a terrorist organization under clause (a) of sub-section (1) of section 35 of the UAPA, 1967. The entity was added to the First Schedule of the UAPA, 1967, and assigned a Statutory Order (S.O.) number for official recognition. Regulated entities were instructed to take note of this Gazette notification for necessary compliance.

The RBI’s directive emphasizes strict compliance with the UAPA Order, requiring regulated entities to report any accounts linked to the newly designated terrorist organization. Entities must also advise the MHA of such accounts, as mandated by the UAPA notification dated February 2, 2021. Failure to comply with these obligations may result in penalties under the UAPA and RBI regulations.