📷 Image Credits: The Times of India
India’s remarkable achievement in the Mutual Evaluation conducted by the Financial Action Task Force (FATF) during 2023-24 has placed the country in the spotlight. The evaluation report, adopted in the FATF plenary in Singapore, has positioned India in the ‘regular follow-up’ category, a distinction shared by only four other G20 nations. This recognition marks a significant milestone in India’s efforts to combat money laundering (ML) and terrorist financing (TF). The FATF has acknowledged India’s efforts in mitigating risks related to ML/TF, including the laundering of proceeds from corruption, fraud, and organized crime.
Moreover, India’s effective measures to shift from a cash-based to a digital economy have been lauded by the FATF. The implementation of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity, coupled with strict regulations on cash transactions, has significantly boosted financial inclusion and digital transactions in the country. These measures have not only made transactions more traceable but have also mitigated ML/TF risks, enhancing overall financial security.
The positive ratings from the FATF will provide India with better access to global financial markets and institutions, increasing investor confidence. It will also facilitate the global expansion of the Unified Payments Interface (UPI), India’s fast payment system. The international recognition from FATF underscores India’s commitment to upholding international standards and actively combatting financial crimes on a global scale.
Since 2014, the Indian government has implemented a series of legislative changes and strengthened enforcement efforts to tackle ML, TF, and black money effectively. These strategic measures align with international standards and have yielded positive results, with Indian authorities successfully dismantling terror funding networks and curbing illicit financial activities. The collaborative efforts of a diverse, multi-disciplinary team comprising various ministries, regulatory bodies, and financial institutions have been crucial in achieving this success.
India’s participation in the FATF Steering Group further solidifies its commitment to enhancing its AML/CFT framework and collaborating with international partners to combat financial crimes. The nation’s dedication to maintaining a secure and transparent financial environment sets a benchmark for other countries in the region to implement international standards effectively. India’s outstanding rating will strengthen its capacity to lead global initiatives against cross-border terror financing and money laundering, further solidifying its position in the global financial landscape.
