admin India has achieved remarkable success in the Mutual Evaluation conducted by the Financial Action Task Force (FATF) for 2023-24. The Mutual Evaluation Report, adopted during the FATF plenary session in Singapore from June 26 to June 28, places India in the prestigious “regular follow-up” category, a distinction shared by only four other G-20 countries. This accomplishment highlights India’s significant progress in combating money laundering (ML) and terrorist financing (TF).
The FATF commended India for its robust measures to mitigate the risks associated with ML and TF, particularly the laundering of proceeds from corruption, fraud, and organised crime. The report also acknowledged India’s effective transition from a cash-based to a digital economy, a move aimed at reducing ML and TF risks. The government’s implementation of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity and stringent cash transaction regulations have significantly increased financial inclusion and digital transactions. These efforts have made financial transactions more traceable, thereby mitigating ML and TF risks.
Economic and Global Implications
India’s exemplary performance in the FATF Mutual Evaluation has significant economic benefits. The recognition reinforces the stability and integrity of the country’s financial system, enhancing investor confidence and facilitating better access to global financial markets. This recognition is expected to aid in the global expansion of India’s fast payment system, the Unified Payments Interface (UPI).
“This recognition from the FATF is a testament to the rigorous and effective measures implemented by India over the last decade to safeguard its financial system from ML/TF threats. It underscores the country’s commitment to international standards and its proactive stance in the global fight against financial crimes,” stated the Press Information Bureau.
Since 2014, India has introduced a series of legislative changes and strengthened enforcement efforts to combat ML, TF, and black money. These measures, aligned with international standards, have proven effective in dismantling terror funding networks and curbing the flow of black money and narcotics. Over a two-year period, the Department of Revenue led India’s engagement with the FATF during the mutual evaluation process, with contributions from a diverse, multi-disciplinary team of representatives from various ministries, the National Security Council Secretariat, state authorities, the judiciary, financial sector regulators, self-regulatory organisations, financial institutions, and businesses.
India, a member of the FATF since 2010 and its Steering Group, remains committed to further strengthening its anti-money laundering and counter-terrorist financing (AML/CFT) framework. The country continues to collaborate with international partners to combat financial crimes, setting a benchmark for other nations in the region. The government emphasised that India’s excellent rating would enhance its capacity to lead global efforts in countering cross-border terror financing and money laundering.
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