RegTech Can Future-proof Compliance at Top Indian Banks

Strengthening Compliance to Meet Global Standards and Avoid Penalties with RegTech

Indian banks are under growing pressure to ensure their antimoney laundering and countering the financing of terrorism (AML/ CFT) measures align with global standards. In a recent report, the Financial Action Task Force (FATF) highlighted numerous compliance weaknesses in Indian financial institutions (Fls) and called for regulators to impose more "dissuasive" monetary penalties.

The intergovernmental body published in September 2024 a 368page mutual evaluation report on India's compliance with global AML/ CFT standards, based on an onsite visit in November 2023. In the report, FATF assessors expressed concerns over the quality and speed of suspicious transaction monitoring and reporting by Fls in India. They noted that some firms took 45-60 days to review and make decisions on alerts for simple issues and took even longer in more complex cases.

FATF assessors also raised concerns over whether Indian Fls are adequately countering terrorism financing (TF). Most of the Fls that assessors met were unable to demonstrate "how they transposed their knowledge of TF risks into, for instance, controls and alerts to monitor transactions" in the conflict areas highlighted in India's 2022 National Risk Assessment.