The Reserve Bank of India (RBI) governor Sanjay Malhotra on March 26 iterated India’s commitment to combat financial crimes addressing the Private Sector Collaborative Forum (PSCF) 2025 of the Financial Action Task Force (FATF) in Mumbai. This year marks the first time that the forum is being held in India, a milestone that was celebrated by the Governor in his opening remarks. He expressed his gratitude to the FATF for the opportunity, acknowledging his prior involvement with the organization during India’s mutual evaluation last year when he served as the Secretary in the Department of Revenue, Ministry of Finance.
The Financial Action Task Force (FATF), which sets global standards for combating illicit financing, has expanded considerably since its formation in 1989. With 40 members and a further reach through regional bodies, FATF’s standards are adopted by over 200 jurisdictions worldwide. These standards play a crucial role in preventing money laundering (ML), terrorism financing (TF), and proliferation financing (PF), contributing significantly to the stability and safety of the global financial system.
Highlighting India’s commitment to tackling illicit financial flows, Shri Malhotra spoke about India’s recent mutual evaluation by FATF. India was placed in the ‘regular follow-up’ category, an honor shared by only a few other G20 countries. This distinction reflects India’s effective Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) framework, which has been honed through years of effort from both the public and private sectors. The Governor emphasized the vital role of the private sector in maintaining the integrity of the financial system, specifically in conducting due diligence, assessing risks, monitoring transactions, and reporting suspicious activities.
Shri Malhotra also emphasized the importance of strong public-private partnerships in securing the financial ecosystem. The RBI, as the regulator of a significant portion of India’s financial system, has taken several initiatives to enhance cooperation and ensure the implementation of FATF recommendations. The Financial Intelligence Unit (FIU)-India has also been proactive, establishing forums like the FPAC (Partnership in AML/CFT) to foster closer collaboration.
Despite the progress, Malhotra pointed out the evolving and increasingly sophisticated nature of threats related to money laundering and terrorism financing, particularly driven by advancements in technology. This underlines the need for continued cooperation across various sectors to counter these threats effectively.
Shri Malhotra also delved into the forum’s agenda for the following days, which includes discussions on emerging topics such as the evolving AML-CFT landscape, financial inclusion, and digitalization in financial services. He stressed that while AML and CFT measures are crucial, they must not become overly burdensome, particularly in developing economies where the focus must also be on promoting financial inclusion without sacrificing security. He highlighted India’s strides in digital KYC (Know Your Customer) and the creation of the Central KYC Records Registry (CKYCR), which has the potential to streamline customer onboarding and due diligence processes.
The Governor concluded his address by calling for continued innovation and collaboration in building a secure, inclusive, and efficient financial system. He emphasized that the collective efforts of all stakeholders can help safeguard the integrity of the global financial ecosystem while fostering growth and financial inclusion. He wished the forum fruitful and productive discussions, looking forward to the outcome of deliberations that would shape the future of the global financial landscape.
With this address, Shri Malhotra reaffirmed India’s commitment to upholding global financial integrity while encouraging innovative solutions that support sustainable economic development.
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