NEW DELHI: With the Financial Action Task Force (FATF) pushing for more disclosures for cross-border wire transfers, the Indian government says it won’t adopt stricter norms at the cost of ease of doing business.
As per government sources, members of FATF are discussing stricter rules for such transactions, and if they are adopted by the global anti-money laundering and anti-terror financing body, Indian regulators will have to implement those rules.
The impact of stricter norms will be felt on transactions carried out using credit, debit, or prepaid cards for purchase of goods and services. Currently, FATF disclosure rules exempt card transactions, but it is looking to bring these transactions under the ambit of stricter disclosures. Once implemented, cost of compliances would go up for credit card companies and banks.
Such financial institutions must collect and maintain identifiable information of such transactions. The FATF is debating on what these identifiable transactions could be. “Not that credit card companies are currently not collecting such information, the discussion is if any of the information can be masked,” said a finance ministry official.
As per ministry sources, the RBI is looking into these rules and is in the process of public consultation to know the industry view on these proposed changes. The ministry official said the RBI is of the view that transparency has to be there in card transactions whether domestic or international. “However, it is mindful of the higher compliance burden and therefore, would try and evolve industry consensus on this,” said the finance ministry official.