FATF recognises India’s efforts in mitigating money laundering, terror financing

The Paris-headquartered body leads global action to tackle money laundering, terrorist and proliferation financing.

The Financial Action Task Force (FATF) in its mutual evaluation 2023-24 has recognised India for its efforts in mitigating the risks arising from money laundering and terror financing, including from corruption, which will lead to greater access to global financing and boost investor confidence, the Finance Ministry said on June 28.

“FATF recognises India’s efforts to combat money laundering and terrorist financing. India has achieved an outstanding outcome in the Mutual Evaluation conducted during 2023-24 by FATF. This marks a significant milestone. Good ratings will lead to better access to global financial markets and institutions and increase investor confidence,” the ministry said in a statement.

The Mutual Evaluation Report of India was adopted in the FATF plenary held in Singapore between June 26 and 28 this year. It demonstrates the overall stability and integrity of India’s financial system. It will also help in the global expansion of the Unified Payments Interface (UPI), the Finance Ministry said.

“FATF recognised India’s effective measures to transition from a cash-based to a digital economy to reduce money laundering risks along with the implementation of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity. Regulations on cash transactions, significant increase in financial inclusion have made transactions more traceable, thereby mitigating laundering risks,” the ministry added.

India’s performance on the FATF Mutual Evaluation accrues significant advantages to our growing economy, as it demonstrates the overall stability and integrity of the financial system, it further said.

This sets a benchmark for countries in the region to effectively implement international standards on terror financing. India’s excellent rating will also enhance the capacity to lead the global effort on countering cross border terror financing and money laundering.

Notably, India’s efforts to tackle black money has helped in dismantling the terror funding network using actionable intelligence inputs. These operations have stemmed the flow of terror funding, black money, and narcotics, even along the coastline.

Over a two-year period, the Department of Revenue spearheaded India's engagement with FATF during the mutual evaluation process.

India is already a member of the FATF Steering Group and the current performance will provide India an opportunity to contribute significantly to the group’s overall functioning.

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.