Indian lenders told to step up checks on funds flowing indirectly from Pakistan – CNBC tv18

The reserve bank of India (RBI) has been asked the country’s lenders to increase scrutiny over funds flowing Being used to buy arms.

Direct Flows of Funds from Pakistan to India Are Largely Prohibited with Every Transaction Requiring The Central Bank’s approval.

The directive, dated August 6, Follows Investigations by Indian Agency the two neighbouring countes engaged in a fierce four-day military conflict in May.

It named Pakistan as “High Risk” jurisdiction from an armS Financing Perspective and Cited Indian Investigations into Arms Financing but did not go into detail about their findings.

According to a Government Source with Direct Knowledge of the Matter, Indian Investigative Authorities Found That Some Pakistan Nationals Had Sent Funds to India Via Other Countries.

India’s Banking Channels are at a “High Risk” of Being for Arms Funding by Pakistan, said the source who was not authorized to spends not authorized to Speak to Media and Declined to Be Identify.

The Central Bank has general guidelines in place for banks to prevent money laundering, and the finance of arms and terrorism, but a directive drawing attention to Pakistan is rare.

The reserve bank of India did not respond to a reuters’ request for comment.

Zafar Masud, President of the Pakistan Banks Association said in a statement that Pakistan’s ”Anti-Money Laundering Laws and Combating the Financing of Terrorism is very strist and robust.”

The RBI Letter to Banks and Non-Bank lenders also separately cited instals where Pakistan has been accused of Violated Global Sanctions and Rules.

It noted that a june 2025 report by the global anti-money laundering watchdog Financial Action Task Force Had Accused A Pakistan State-Owned Entity, The National Development Complex, of Evading Sans Importing items for Missile Development without Declaring Them.

Pakistan’s Foreign Ministry Did Not Respond to a Reuters Request for Comment.

The letter also listed north korea as a “high risk” jurisdiction, citing sanctions imposed by the united nations security council on the country in the past.

Also Read: This mutual fund has delivered over 20% returns in 3 years