NEW DELHI: India has achieved a remarkable outcome in the Financial Action Task Force (FATF) Mutual Evaluation conducted during 2023-24. FATF is an intergovernmental organisation established in 1989 to combat money laundering, terrorist financing, and other related threats to the integrity of the international financial system.
The Mutual Evaluation Report of India, adopted during the FATF plenary held in Singapore from June 26th to 28th, places the country in the โregular follow-upโ category. This prestigious classification is shared by only four other G20 nations, marking a significant milestone in Indiaโs fight against money laundering (ML) and terrorist financing (TF).
The FATF recognized Indiaโs robust efforts in mitigating risks associated with ML and TF, including the laundering of proceeds from corruption, fraud, and organized crime. The report highlighted Indiaโs effective transition from a cash-based to a digital economy, a move aimed at reducing ML and TF risks. The implementation of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity, coupled with stringent regulations on cash transactions, has significantly boosted financial inclusion and digital transactions. These measures have made financial activities more traceable, thus mitigating ML/TF risks and enhancing the overall financial landscape.
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Indiaโs stellar performance in the FATF Mutual Evaluation brings numerous advantages to its burgeoning economy. It underscores the stability and integrity of the countryโs financial system, which is likely to enhance access to global financial markets, increase investor confidence, and aid in the global expansion of the Unified Payments Interface (UPI), Indiaโs fast payment system.
This recognition from FATF is a testament to the rigorous and effective measures India has implemented over the past decade to safeguard its financial system from ML/TF threats. It showcases the countryโs commitment to international standards and its proactive stance in the global fight against financial crimes. Indiaโs excellent rating sets a benchmark for other countries in the region, enhancing its capacity to lead global efforts against cross-border terror financing and money laundering.
Since 2014, the Indian government has enacted a series of legislative changes and bolstered enforcement efforts to tackle ML, TF, and black money. These strategies have aligned Indiaโs measures with international standards, yielding positive results. Indian authorities have successfully dismantled terror funding networks using actionable intelligence, curbing the flow of terror funding, black money, and narcotics.
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The Department of Revenue (DoR) spearheaded Indiaโs engagement with FATF during the two-year mutual evaluation process. This success was driven by the exceptional efforts of a diverse, multi-disciplinary team comprising representatives from various ministries, the National Security Council Secretariat (NSCS), state authorities, the judiciary, financial sector regulators, self-regulatory organizations, financial institutions, and businesses. This collaborative effort showcased Indiaโs effective AML/CFT framework.
Already a member of the FATF Steering Group, Indiaโs current performance will enable it to contribute significantly to the groupโs overall functioning. The country remains committed to further strengthening its AML/CFT framework and continuing its collaboration with international partners to combat financial crimes, ensuring a secure and transparent financial environment for all.
