FATF Endorses India’s Institutional Mechanisms like JAM in Latest Norms

FATF Endorses India’s Institutional Mechanisms like JAM: FATF has endorsed India’s institutional mechanisms like Jan-Dhan, Aadhaar, and Mobile (JAM) Trinity, digital stacks, customer due diligence, and Financial Stability and Development Council (FSDC saying financial inclusion and fight against financial crime are mutually supportive.

The new guidelines have cited India’s financial inclusion efforts through digital identification and biometric data registries.

“In India, a multi-pronged approach to promote financial inclusion and promote transactions through financial channels, called JAM Trinity, was developed based on three pillars: (1) access to financial services to the unbanked population, (2) biometric based identification for every citizen, and (3) the development of a digital payment ecosystem. As per the Global Findex, access to financial services increased from 35% of the total population in 2011 to 53% in 2014 and to 80% in 2017,” the guidelines said.

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India’s electronic know-your-customer (KYC) through Aadhaar is a “good” example of collaborative measures that reduce compliance costs for regulated entities while improving outcomes, the global body said.

FATF has updated its ‘Guidance on Financial Inclusion and Anti-Money Laundering and Terrorist Financing Measures’ after extensive consultation with both public and private sectors. The guideline was adopted by the global financial crimes watchdog at its June 2025 plenary.

FATF said its risk-based approach is a facilitator of financial inclusion. A country’s anti-money laundering and countering the financing of terrorism (AML/CFT) legal framework should explicitly allow regulated entities to implement simplified measures where lower risks are identified and should not make the framework overly prescriptive or stringent.

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Highlighting India’s frameworks, FATF said the country created a solid institutional framework to coordinate and support its financial inclusion strategy. “The National Strategy for Financial Inclusion for India 2019-2024 provides (1) an analysis of the status and constraints in financial inclusion in India, (2) specific financial inclusion goals, (3) a strategy to reach the goals, and (4) mechanisms to measure progress,” it added. The strategy, prepared by the Reserve Bank of India (RBI), reflects wide-ranging consultations with relevant stakeholders, it added.

Citing an example of India’s “solid institutional framework” to coordinate and support financial inclusion strategy, FATF praised the creation of FSDC — an apex body for inter-regulatory coordination of the financial sector, chaired by the Union Finance Minister. Its members include top bureaucrats and heads of financial sector regulators like the RBI and Sebi, among others.

The FATF document also highlighted the ease of compliance for customers in the Indian system. “…the country’s CDD regime was flexible enough to accommodate financial inclusion and that the developments in e-KYC further reduced the need for relying on SDD [Simplified customer due diligence] practices,” it added.

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