The Financial Action Task Force (FATF), an international organization that works to prevent money laundering and the funding of terrorism, has classified India as being in the "regular follow-up" category and concluded that the country has reached a high level of technical compliance in accordance with the task force's requirements.
The FATF released its findings during its plenary meeting in Singapore, following a year-long process in which a delegation visited New Delhi to assess India's actions on the ground and speak with senior officials. Despite the task force being unbacked by a statute, international investors place a high value on its observations. The finance ministry said of the review's findings, "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."
The government also stated that higher grades will boost investor confidence and provide easier access to international financial markets and institutions. Additionally, it will use the Unified Payments Interface (UPI), India's quick payment system, in its global growth.
India's placement in the "regular follow-up" category, which is only held by four other G20 nations, represents a major accomplishment in the country's fight against the funding of terrorism and money laundering.
India has been successful in reducing the risks associated with money laundering and terrorist financing, including the laundering of earnings from fraud, corruption, and organized crime, according to the FATF. India has taken a number of sensible steps to lower risks in its shift from a cash-based to a digital economy.
It also emphasized how strict cash transaction regulations and the introduction of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity have significantly increased digital transactions and financial inclusion. By making transactions more traceable, these measures have reduced the risk of money laundering and terrorist financing and improved financial inclusion. The FATF last conducted an evaluation in 2010. Owing to the Covid-19 epidemic and the FATF's assessment procedure halt, India's mutual evaluation was delayed until 2023.
