The logo of the FATF.
Credit: Reuters File Photo
New Delhi: India is pitching for greater disclosures by fintech firms, credit card companies and payment aggregators (PAs) at the Financial Action Task Force whereby the sender and recipient in a cross-border financial transaction can be identified and shared with law enforcement agencies as and when sought.
Currently, the Travel Rules of Financial Action Task Force (FATF) under which data relating to name of sender and recipient and the country of origin is recorded in any cross-border financial transactions.
The policy development group (PDG) of the FATF is now deliberating on whether the required information is clearly available to law enforcement agencies or does the information gets masked in any form. Masking of information leads to delay in information sharing by financial institutions involved in cross-border transactions with law enforcement agencies.
"The debate is whether the standards need to be tweaked further so that information can be clearly provided in case of cross-border wire transfers by using credit cards, or payment aggregators or fintech platform," an official source said.
At the PDG of the FATF, India is pitching for greater disclosure norms and transparency without hurting the industry, the source added.
Sources said the main concern of credit cards, payment aggregators or fintech platform is the cost involved and the software changes required to implement the proposal.
The official source further said that in case of domestic fund transfer, all the required information is readily available, but the issue arises in case of cross-border transactions.
The PDG at the FATF is looking at what is the "identifiable information" and what all data relating to fund transfers should be made available by countries.
Once it is approved by global financial crime watchdog FATF, all member countries would be implementing such disclosure norms within 2-3 years, sources added.
At the time of the mutual evaluation by the FATF, member countries will have to inform the FATF that the systems and rules are in place which allow all identifiable information to be accessed by law enforcement agencies.
The FATF's fourth round of mutual evaluation for India happened in November 2023. The report of this round would be released on September 18.
The fifth round of evaluation is slated sometime in 2031-32 fiscal.