India achieved an outstanding outcome in the Mutual Evaluation conducted during 2023-24 by the Financial Action Task Force (FATF). The Mutual Evaluation Report of India, which was adopted at the FATF plenary held in Singapore between June 26 and June 28, 2024, placed India in the ‘regular follow-up’ category, a distinction shared by only four other G20 countries. This marks a significant milestone in the nation’s efforts to combat money laundering (ML) and terrorist financing (TF). Risks arising from ML/TF, including the laundering of proceeds from corruption, fraud, and organised crime were mitigated. Effective measures were implemented by India to transition from a cash-based to a digital economy to reduce ML/TF risks.
Implementation of the JAM (Jan Dhan, Aadhaar, Mobile) Trinity, along with stringent regulations on cash transactions, has led to a significant increase in financial inclusion and digital transactions. These measures have made transactions more traceable, thereby mitigating ML/TF risks and enhancing financial inclusion. India’s performance on the FATF Mutual Evaluation accrues significant advantages to the country’s growing economy, as it demonstrates the overall stability and integrity of the financial system. Good ratings will lead to better access to global financial markets and institutions and increase investor confidence. It will also help in the global expansion of the Unified Payments Interface (UPI), India’s fast payment system.
