A mutual evaluation report by the Financial Action Task Force (FATF) has found a 'high level of technical compliance' in India's measures to tackle illicit finance.

The country's main anti-money laundering (AML) risks come from domestic fraud (including cyber-fraud), corruption and drug trafficking, according to FATF. Its AML framework is achieving good results, including on understanding risk, accessing beneficial ownership information and depriving criminals of their assets. Authorities make good use of financial intelligence and co-operate effectively, both domestically and internationally.

'Despite the size and institutional complexity of the Indian system, Indian authorities cooperate and coordinate effectively on matters dealing with illicit financial flows, including the use of financial intelligence', says the report. India also achieved positive results in international co-operation, asset recovery and implementing targeted financial sanctions for proliferation financing.

India's federal finance ministry took extensive steps in 2023 to prepare for FATF's inspection, including several amendments to the Prevention of Money Laundering (Maintenance of Records) Rules. The shareholding threshold for company beneficial owners was reduced to 10 per cent. Banks and financial institutions were ordered to determine whether a client is acting on behalf of a beneficial owner and to check the identity of the beneficial owner at the time of commencement of an account relationship.