Financial Action Task Force Report

India has secured a stronger ranking than major global economies like the U.S., Japan, China, and Germany in the latest report by the Financial Action Task Force (FATF), scheduled to be released on September 19, 2024.

Key Points

‘Regular Follow-Up’ Category: India has been placed in the ‘regular follow-up’ category, indicating a robust policy framework against money laundering and terror financing.
Mutual Evaluation: The ranking was determined in FATF's fourth round of mutual evaluation in 2023, and the report was adopted during the June 2024 FATF Plenary in Singapore.
FATF Composition: The FATF consists of 38 countries and two regional bodies, the European Commission and the Gulf Cooperation Council.
40 Compliance Metrics: India scored high on 37 out of 40 FATF parameters, which include policies on anti-money laundering, terror financing, transparency of legal entities, and international cooperation.
Global Comparison: Countries like the U.S. and Germany, placed in the ‘enhanced follow-up’ category, have less stringent frameworks compared to India.
Increased Credibility: The ranking enhances India’s global financial reputation, potentially attracting more investments and increasing access to international markets.
Lower Borrowing Costs: A stronger FATF ranking could reduce India’s borrowing costs, further boosting its financial stability.
Trade Finance Instruments: Improved ratings will increase trust in India's trade finance instruments, boosting international trade.