RBI tells banks to monitor accounts linked to newly banned Shahzad Bhatti Network

The Reserve Bank of India, in a circular dated 24 September 2026 (RBI/2026-2027/270), has directed banks and other regulated entities to implement a Ministry of Home Affairs notification (S.O. 5080(E), dated 16 September 2026) that designates the "Shahzad Bhatti Network (SBN)" as a terrorist organisation. The designation is made under clause (a) of sub-section (1) of Section 35 of the Unlawful Activities (Prevention) Act, 1967, and the organisation now stands listed in the First Schedule to the Act alongside other banned outfits. The RBI circular is addressed to commercial banks, small finance banks, payment banks, urban and rural co-operative banks, regional rural banks, local area banks, non-banking financial companies, asset reconstruction companies and all-India financial institutions.

It requires these regulated entities to strictly follow the procedure set out in the Central Government's UAPA Order of 2 February 2021: they must check whether any of their accounts match individuals or organisations named in the UAPA schedules, and where a match is found, report the account details to the Financial Intelligence Unit-India and separately inform the Ministry of Home Affairs. The practical effect is that an organisation can be branded "terrorist" through an executive notification under Section 35, without a prior criminal conviction, and the regulated financial system is then mobilised to detect, freeze awareness of, and report on its dealings.