Financial Action Task Force's thumbs-up places India in select group with only four other G20 countries
New Delhi, Jun 28, 2024
India has achieved an outstanding outcome in the Mutual Evaluation conducted during 2023-24 by the Financial Action Task Force (FATF).
The evaluation report of India, which was adopted in the FATF plenary held in Singapore between June 26-28, places India in the 'regular follow-up' category, a distinction shared by only four other G20 countries.
This marks a significant milestone in the nation's efforts to combat money laundering (ML) and terrorist financing (TF).
FATF recognises efforts made by India on:
Mitigating the risks arising from ML/TF, including the laundering of proceeds from corruption, fraud, and organised crime.
Effective measures implemented by India to transition from a cash-based to a digital economy to reduce ML/TF risks.
Implementation of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity, along with stringent regulations on cash transactions, has led to a significant increase in financial inclusion and digital transactions; these measures have made transactions more traceable, thereby mitigating ML/TF risks and enhancing financial inclusion.
What a good rating means for India
India’s performance on the FATF Mutual Evaluation accrues significant advantages its growing economy, as it demonstrates the overall stability and integrity of the financial system.
Good ratings will lead to better access to global financial markets and institutions and increase investor confidence. It will also help in the global expansion of the Unified Payments Interface (UPI), India’s fast payment system.
India is already a member of the FATF Steering Group. India's current performance will provide India with an opportunity to contribute significantly to the group's overall functioning.
What the Centre said
This recognition from the FATF is "testament to the rigorous and effective measures implemented by India over the last 10 years to safeguard its financial system from ML/TF threats", said a statement by the Union finance ministry.
"It underscores the country’s commitment to international standards and its proactive stance in the global fight against financial crimes. This sets a benchmark for countries in our region to effectively implement international standards on terrorist financing. India's excellent rating will enhance the capacity of our country to lead the global effort on countering cross border terror financing and money laundering," the ministry said.
It further said that India remains committed to further strengthening its AML/CFT framework and continuing its collaboration with international partners to combat financial crimes. "The nation will build on this success to ensure a secure and transparent financial environment for all," it added.
About FATF
The Financial Action Task Force (FATF) is an intergovernmental organisation established in 1989 as the international watchdog to combat money laundering, terrorist financing, and other related threats to the integrity of the international financial system. India became a member of FATF in 2010.
[The Times of India]
