The FATF mutual evaluation report recognising India's fight against money laundering and terror financing is satisfying and exemplary, highly placed sources said.

As regards the issues flagged by the international watchdog to combat money laundering and terror financing, sources said these were not fundamental or significant deficiencies.

The Financial Action Task Force (FATF), the global financial crime watchdog, on Friday said India has reached a high level of 'technical compliance' with its norms and the country's anti-money laundering and terror financing efforts is achieving good results.

The mutual evaluation report on India was adopted at the FATF June 2024 plenary in Singapore.

In the fourth round of FATF mutual evaluations, 17 countries from G-20 nations were evaluated of which only 4, including India, are placed in 'regular follow-up' category. The remaining G-20 nations were placed in 'enhanced follow-up' and one in 'grey list'.

Sources said 'regular follow-up' indicates that India needs to submit progress report on recommended actions in October 2027. Those in the 'enhanced follow-up' category would have to submit follow-up report every year.

"Overall India's performance is exemplary and satisfying. Given the diverse country there is always room for improvement," sources said.

The FATF, however, observed that India needs to strengthen the supervision and implementation of preventive measures in some of the non-financial sectors. It also noted that India needs to address delays relating to concluding money laundering and terror financing prosecutions.

Sources said these are not fundamental or significant deficiencies.

In a statement, the finance ministry said India's performance on the FATF mutual evaluation holds significant advantages for the country's growing economy, as it demonstrates the overall stability and integrity of the financial system.

"Good ratings will lead to better access to global financial markets and institutions and increase investor confidence. It will also help in the global expansion of the Unified Payments Interface (UPI), India's fast payment system," the ministry said.