Domestic companies benefit from the good rating India got from FATF, now a lot of foreign investment will come.
India’s good rating from the Financial Action Task Force will help domestic companies receive foreign investment without going through excessive scrutiny. Highly placed sources said this. He described the FATF report as satisfactory and exemplary, recognizing India’s campaign against money laundering and terrorist financing. India’s mutual assessment report on money laundering was accepted during the FATF Plenary Meeting in Singapore 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 India needs to address the issue of delays in completing trials of money laundering and terrorism financing cases. Regarding the issues raised by the international watchdog, sources said these were 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 positive results.
India’s performance is important for growing economy
Meanwhile, the Finance Ministry said that India’s performance in the FATF mutual assessment is important for the growing economy as it reflects the overall stability and integrity of the financial system. “A good rating will facilitate better access to global financial markets and institutions and enhance investor confidence,” the ministry said in a statement. In the fourth round of FATF evaluation, 17 countries of the G-20 group have been evaluated, out of which only five countries, including India, have been kept in the category of ‘regular follow-up’. At the same time, other countries of the group have been kept in the category of ‘more follow up’. One country has been placed in the ‘watching list’. FATF places its member countries in one of four categories. Among these, the category with regular follow-up comes at the top.
Only 24 out of 177 countries are in regular follow up.
Out of 177 countries under the purview of FATF, only 24 countries including India have been kept in ‘regular follow-up’. According to sources, placing it in the ‘regular follow up’ category indicates that India needs to submit a progress report on the recommended actions in October 2027. Whereas countries included in the ‘higher follow up’ category will have to submit a report every year regarding further action. 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
The FATF has said that India needs to strengthen supervision and implementation of preventive measures in certain non-financial sectors. It said India needs to address the delays in prosecuting cases related to money laundering and terrorism financing. Sources said, “Overall India’s performance is exemplary and satisfactory. Being a diverse country, there is always room for improvement.” A highly placed source said, “Indian companies raising investments abroad are required to undergo detailed background checks and enhanced due diligence measures similar to those applicable to countries not included in regular follow-ups. No details about this report are publicly available. The report is confidential at this time and will be released at a later date.
