New Delhi: Financial Action Task Force (FATF), a global agency monitoring money laundering and terrorist funding, has admitted that India is facing a threat from IS, Al Qaeda and other radical Islamic forces.

These forces are mainly active in Jammu and Kashmir and their strings are indirectly connected to other parts of the country as well. FATF has also called the insurgent organizations and left wing extremist organizations active in the Northeast as a threat to India. It has also acknowledged that India has been a victim of terrorism for years.

Slow pace of hearing of cases related to TF

FATF has praised India's efforts to stop money laundering (ML) and terror funding (TF). However, FATF is not satisfied with the slow pace of hearing and conclusion of cases related to ML and TF. It has recommended to speed up India's efforts in this direction. According to a Finance Ministry official, trials are currently underway in 864 cases of money laundering and more than 1,400 cases of TF.

India has been a victim of terrorism for years- FATF

On Monday, FATF released its report on India's evaluation in the cases of ML and TF and India has met most of its standards. The report evaluates India's efforts between 2018 and 2023. Countries that do not follow FATF's recommendations may face global financial sanctions. In the report, FATF has recommended strict monitoring of non-profit organizations (NPOs) operating in India as there is a high possibility of terrorism funding through them. India says that it will adopt a 'nuanced' approach in dealing with them.

Aadhaar based banking system, biometric system appreciated

The report says that in the last ten years, due to Jan Dhan accounts, Aadhaar based banking system, biometric system and promotion of digital economy, cash transactions have reduced which has increased transparency and is helping in reducing money laundering. The ban on cash transactions of more than two lakhs and the implementation of rules like KYC on property purchase and sale have reduced the use of black money in real estate. But even now the use of black money in real estate continues.

Action on lakhs of shell companies in five years

FATF has emphasized on the need to bring more transparency in India's gems and jewellery and fintech sector. Along with the action taken against lakhs of shell companies in the last five years in India, the efforts made for financial recovery in the Vijay Mallya fraud case and returning the money to the victim party (bank) have also been appreciated.

According to the Finance Ministry official, Rs 14,000 crore was returned to the victim (bank) in the fraud case related to Mallya. He said that to expedite the trial of ML and TF cases, the number of employees is also being increased along with the establishment of a special court. There are preparations to tighten the cash transactions in the gems and jewellery sector.

Only four other G-20 countries are in the 'regular follow-up' category

In the 368-page report, India has been placed in the 'regular follow-up' category and only four other G-20 countries are included in this category. India's next assessment will now take place in 2031.