'Good FATF rating to help India Inc raise overseas funds without elaborate background checks'

    New Delhi, Jun 28 (PTI) The good FATF rating obtained by India will enable domestic companies to access overseas investments without going through elaborate background checks and enhanced due diligence process, highly placed sources said.
     The global crime watchdog, FATF on Friday adopted mutual evaluation report on India and placed the country in "regular follow-up" category.
     The Financial Action Task Force (FATF) hailed India for achieving high level of technical compliance. It said the country's efforts towards anti-money laundering (AML) and countering of terror financing (CFT) are achieving good results.
     Sources said good rating by FATF means that the financial system and AML/CFT framework is robust.
     "Indian companies accessing investments abroad will not be required to go through elaborate background checks and enhanced due diligence measures applicable to jurisdictions not placed in regular follow-up," a highly placed source said.
     FATF places member countries in any of the four categories - regular follow-up, enhanced follow-up, grey list and black list - regular follow-up being the top most category.
     Sources said only 5 countries including India, among G20 nations have been placed in regular follow-up category after the mutual evaluation report.
     Amongst 177 countries covered by FATF and its Regional Bodies (FSRBs), only 24 nations, including India are in 'regular follow-up'.
     Even developed countries like the US, Australia, Canada, New Zealand, Singapore, European nations such as Germany, Finland, Denmark are in enhanced follow-up category, sources added.
     'Enhanced follow-up' is given to countries with significant deficiencies.
     As per the mutual evaluation process, the assessment is based on 40 recommendations and 11 immediate outcomes. One needs to get higher rating in at least 33 recommendations and 5 immediate outcomes to be placed in regular follow-up.
     The evaluation and rating are very stringent and hence getting placed in regular follow-up is a tall order ask, sources added.
     There are no specifics of the report available in public domain as the report is still confidential and will be released later.
     "But overall India's performance is exemplary and satisfying. Given the diverse country there is always a room for improvement. Regular follow-up for India means there are no fundamental or significant deficiencies found," the source added.
     The FATF had also observed that India needs to strengthen the supervision and implementation of preventive measures in some of the non-financial sectors.
     It also noted that India needs to address delays relating to concluding money laundering and terror financing prosecutions.
     In a statement after the FATF report adoption, the finance ministry said India's performance on the FATF mutual evaluation holds 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. It will also help in the global expansion of the Unified Payments Interface (UPI), India's fast payment system," the ministry said.

(This story has not been edited by THE WEEK and is auto-generated from PTI)