FATF's Evaluation of India's Anti-Money Laundering Systems Highlights Progress and Needed Improvements

The Financial Action Task Force (FATF) released a mutual evaluation report, assessing India's anti-money laundering (AML) and counter-terror financing (CFT) systems. While noting effective measures, the report calls for major improvements, particularly in prosecution. India's next evaluation is scheduled for 2031, and significant progress in financial inclusion efforts was recognized.

The Financial Action Task Force (FATF) released its much-anticipated mutual evaluation report on India's anti-money laundering (AML) and counter-terror financing (CFT) systems. The report notes that while India's measures are 'effective,' there is a pressing need for major improvements in prosecution effectiveness.

This comprehensive 368-page report, featuring an image of India's new Parliament draped in Tricolor lights, was adopted during the FATF's plenary meeting in June. It comes as the first such review since 2010 and places India in the 'regular follow up' category, shared by only four other G20 nations.

The FATF emphasized that while India has made significant strides in financial inclusivity and digital payment systems, vulnerabilities in prosecuting financial crimes persist, especially with a considerable backlog of cases. The nation will face its next evaluation in 2031, and efforts to enhance the system must continue.

(With inputs from agencies.)