look news india
Ahmedabad: The Financial Action Task Force (FATF) is considering implementing new disclosure norms for cross-border online transactions. The FATF is an organization of governments of many countries whose job is to prevent money laundering. In the proposed amendment of FATF, credit cards and wire transfers will also come under new rules and the change in rules will affect both domestic and foreign transactions.
A media report quoted sources in the Finance Ministry as saying that the proposed changes will include real-time tracking of wire transfers. Wire transfers are available in existing standards but are not always used for monitoring. These new potential changes will affect both international and domestic transactions.
Finance ministry officials said India places emphasis on disclosure and transparency but we also believe that such measures should not create problems for the fintech industry or make it difficult for people to do business.
FATF is also examining the implementation of the 'Travel Rule'. This rule will enable tracking of all cross-border online transactions. Currently, credit card transactions only require the name of the cardholder and his country. The new norms will increase real-time tracking of transactions. Along with this, more information is to be disclosed. This will ultimately increase the operating costs for credit card companies and financial institutions.
A Finance Ministry source said that if the new rules are implemented, legal and procedural changes will have to be made in many countries. The industry believes that these changes will increase the compliance cost for credit card companies.
India's role will be important in the discussion on these proposed changes. The special thing is that an important meeting of FATF is going to be held in Mumbai next year in this regard. RBI is also talking to the concerned parties on this issue.
The government is in favour of increasing transparency but the increase in compliance cost should not hinder the speed and growth of transactions. FATF also wants to change the standards for accounts with financial impact.