The good rating given to India by the Financial Action Task Force will help domestic companies to get foreign investment without going through much scrutiny. Highly placed sources said this on Friday. They described the FATF report recognizing India’s campaign against money laundering and financing of terrorist activities as satisfactory and exemplary. During the FATF’s plenary meeting in Singapore, it accepted India’s mutual evaluation report on money laundering and praised its steps taken against terror financing.
Need to deal with this issue
The global organization said in a brief statement that India is achieving good results in both these areas. However, FATF said that India needs to deal with the issue of delay in completing the hearing of money laundering and terrorism financing cases. Regarding the issues raised by the international monitoring body, sources said that these are not fundamental or significant flaws. FATF has said that India has reached a high level of ‘technical compliance’ with its norms and India’s efforts against money laundering and terrorist funding are yielding good results.
India’s performance is important for the growing economy
Meanwhile, the Finance Ministry said that India’s performance in the FATF mutual evaluation is very important for the growing economy, as it reflects the overall stability and integrity of the financial system. The ministry said in a statement, “Good ratings will provide better access to global financial markets and institutions and increase investor confidence.” In the fourth round of FATF’s evaluation, 17 countries of the G-20 group have been evaluated, out of which only five countries, including India, have been placed in the category of ‘regular follow-up’. At the same time, other countries of the group have been placed in the category of ‘more follow-up’. One country has been placed in the ‘monitoring list’. FATF places its member countries in one of the four categories. Among these, the category of regular follow-up comes at the top.
Only 24 out of 177 countries are in regular follow-up
Out of the 177 countries covered under FATF, only 24 countries including India have been kept in ‘regular follow-up’. According to sources, being kept in the ‘regular follow-up’ category indicates that India needs to submit a progress report on the recommended actions in October 2027. At the same time, countries included in the ‘more follow-up’ category will have to submit a report related to further action every year. According to sources, America, Australia, Canada, New Zealand, Singapore, Germany, Finland and Denmark have also been kept in this category.
India needs to do this
FATF has said that India needs to strengthen supervision and implementation of preventive measures in some non-financial sectors. It said that India needs to overcome the delay in bringing cases related to money laundering and terrorism financing to the end. Sources said, “Overall, India’s performance is exemplary and satisfactory. Being a diverse country, there is always scope for improvement.” “Indian companies raising investments abroad will not be required to undergo the enhanced scrutiny measures applicable to countries not covered under detailed background checks and regular follow-ups,” a highly placed source said. No details about the report are publicly available. The report is confidential for now and will be released later.
