New Delhi: India's good FATF rating will allow domestic companies to access overseas investments without going through elaborate background checks and enhanced due diligence processes, senior sources said.
Global crime watchdog FATF on Friday adopted a mutual evaluation report on India and placed the country in the "regular monitoring" category.
The Financial Action Task Force (FATF) praised India for achieving a high level of technical compliance. He said the country's efforts towards anti-money laundering (AML) and countering the financing of terrorism (CFT) are achieving good results.
Sources said a good FATF rating means the financial system and AML/CFT framework are sound.
"Indian companies accessing overseas investments will not have to go through elaborate background checks or enhanced due diligence measures applicable to jurisdictions that are not subject to regular monitoring," a senior source said.
The FATF places member countries in any of four categories: regular monitoring, enhanced monitoring, gray list and black list, with regular monitoring being the most important category.
Sources said only five countries, including India, among the G20 nations have been placed in the regular monitoring category after the mutual evaluation report.
Among the 177 countries covered by the FATF and its regional bodies (FSRB), only 24 nations, including India, are under "regular monitoring".
Even developed countries such as the United States, Australia, Canada, New Zealand, Singapore and European nations such as Germany, Finland and Denmark are in the enhanced monitoring category, the sources added.
'Enhanced monitoring' is given to countries with significant deficiencies.
According to the mutual evaluation process, the evaluation is based on 40 recommendations and 11 immediate results. You need to get a higher rating on at least 33 recommendations and 5 immediate results to be able to follow up regularly.
The evaluation and grading are very strict and therefore getting placed on regular monitoring is a difficult task, sources added.
There are no details of the report available in the public domain as the report remains confidential and will be published later.
"But overall India's performance is exemplary and satisfactory. Given the diversity of the country, there is always room for improvement. Regular monitoring of India means that no fundamental or significant deficiencies have been found," the source added.
The FATF had also observed that India needs to strengthen supervision and implementation of preventive measures in some of the non-financial sectors.
He also noted that India needs to address delays related to the conclusion of money laundering and terrorist financing proceedings.
In a statement following the adoption of the FATF report, the Finance Ministry said India's performance in the FATF mutual evaluation has significant advantages for 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. They will also help in the global expansion of the Unified Payments Interface (UPI), India's fast payments system," the ministry said.
Global crime watchdog FATF on Friday adopted a mutual evaluation report on India and placed the country in the "regular monitoring" category.
The Financial Action Task Force (FATF) praised India for achieving a high level of technical compliance. He said the country's efforts towards anti-money laundering (AML) and countering the financing of terrorism (CFT) are achieving good results.
Sources said a good FATF rating means the financial system and AML/CFT framework are sound.
"Indian companies accessing overseas investments will not have to go through elaborate background checks or enhanced due diligence measures applicable to jurisdictions that are not subject to regular monitoring," a senior source said.
The FATF places member countries in any of four categories: regular monitoring, enhanced monitoring, gray list and black list, with regular monitoring being the most important category.
Sources said only five countries, including India, among the G20 nations have been placed in the regular monitoring category after the mutual evaluation report.
Among the 177 countries covered by the FATF and its regional bodies (FSRB), only 24 nations, including India, are under "regular monitoring".
Even developed countries such as the United States, Australia, Canada, New Zealand, Singapore and European nations such as Germany, Finland and Denmark are in the enhanced monitoring category, the sources added.
'Enhanced monitoring' is given to countries with significant deficiencies.
According to the mutual evaluation process, the evaluation is based on 40 recommendations and 11 immediate results. You need to get a higher rating on at least 33 recommendations and 5 immediate results to be able to follow up regularly.
The evaluation and grading are very strict and therefore getting placed on regular monitoring is a difficult task, sources added.
There are no details of the report available in the public domain as the report remains confidential and will be published later.
"But overall India's performance is exemplary and satisfactory. Given the diversity of the country, there is always room for improvement. Regular monitoring of India means that no fundamental or significant deficiencies have been found," the source added.
The FATF had also observed that India needs to strengthen supervision and implementation of preventive measures in some of the non-financial sectors.
He also noted that India needs to address delays related to the conclusion of money laundering and terrorist financing proceedings.
In a statement following the adoption of the FATF report, the Finance Ministry said India's performance in the FATF mutual evaluation has significant advantages for 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. They will also help in the global expansion of the Unified Payments Interface (UPI), India's fast payments system," the ministry said.
