FATF Critiques India’s Approach to NPO Terror Financing Risks

The Financial Action Task Force (FATF) has critiqued India's approach to managing Non-Profit Organisations (NPOs) regarding terror financing risks. Although India has identified 7,500 NPOs as high-risk, the FATF argues India's supervision is not adequately focused or risk-based. India's financial authorities are urged to improve outreach and coordination.

The Financial Action Task Force (FATF) has issued a critique of India's approach to mitigating terror financing risks within its Non-Profit Organisation (NPO) sector. According to the FATF, India has identified 7,500 NPOs as high-risk but has failed to supervise them based on specific risks.

While India supervises its NPO sector for general transparency and governance, the FATF contends that this regulatory approach does not adequately address targeted risks of terrorist financing abuse. The global watchdog highlights the need for more focused and coordinated outreach from Indian authorities.

The FATF report points out that many NPOs are burdened with complex laws and procedures without receiving adequate support or consultation. The Indian government has stated it will adopt a more nuanced approach to dealing with at-risk NPOs, emphasizing improved outreach to maintain financial accountability and donor transparency.