Need for Targeted Financial Regulations
- RBI Governor Sanjay Malhotra stressed the importance of precise laws to combat money laundering (AML) and terror financing (CFT).
- He warned against using broad regulatory measures that could unintentionally harm legitimate businesses and investments.
Addressing Compliance Burden
- Financial institutions face a high compliance burden due to multiple overlapping laws.
- The challenge is to balance security measures while ensuring smooth financial operations.
Risk-Based Approach to AML & CFT
- A risk-based strategy can help reduce unnecessary compliance burdens.
- However, Mr. Malhotra cautioned that no risk model is perfect, and regulators must continuously refine and improve assessments.
FATF Private Sector Forum in India
- The FATF Private Sector Collaborative Forum (PSCF) 2025 is being hosted in India for the first time.
- Discussions focus on global best practices to strengthen financial security without hampering economic growth.
RBI’s stance highlights the need for surgical precision in financial regulations—ensuring illicit activities are curtailed while maintaining a favorable environment for legitimate investments and economic growth.
