India has achieved a good level of technical compliance with the standards of FATF. This constitutes immense progress in the processes related to AML, CFT, and CPF, as elaborated in a statement by FATF recently.
In the period 2023-24, India underwent a Mutual Evaluation by FATF, which was concluded with the adoption of the Mutual Evaluation Report of India by the FATF plenary in Singapore during June 26 to June 28, 2024. This places India in the status of 'regular follow-up,' a special category created for it and shared only by four other G20 nations.
The report supports the steps that India has taken toward its struggle against money laundering and financing of terrorism. FATF recognized some key areas where the efforts of India had borne fruit, especially in the following areas of risk mitigation associated with ML and TF, particularly in relation to corruption, fraud, and organized crime. Designing measures to transition from cash-based to digital transactions hence reducing ML/TF risks.
Introduce policies like JAM Trinity and stern regulations over cash transactions to enhance financial inclusion and traceability of transactions.
High ratings at the FATF Mutual Evaluation are of substantial economic benefit to India. Theseinjaay confidence in the stability and integrity of its financial system. Accordingly, the positive ratings are likely to improve access to global financial markets and institutions with a corresponding boost in investor confidence. This would further the expansion of India's Unified Payments Interface, a rapid payment system.
This recognition showcases India's commitment to the effective implementation of stringent measures concerning anti-money laundering and combating of financing of terrorism since the country's induction into FATF in 2010. It sets a benchmark for regional countries in the adoption of international standards effectively.
The upgraded rating for India also brings the country to the front line in the international drive against cross-border terror financing and money laundering, more so up to legislative efforts and enforcement actions since 2014, ranging from disrupting terrorist funding networks to illicit financial activities, including narcotics trafficking.
Experts took this acknowledgement as goodwill endorsement for India's effort in strengthening the framework of its financial regulation to the international benchmark for securing world at large financial stability and security.
FATF is an inter-governmental body mandated to monitor and progress made on anti-money laundering and Combating the Financing of Terrorism measures around the world, having been set up in 1989.
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