India to push FATF for Pakistan's re-entry into 'grey list': Report

India will reportedly urge the Financial Action Task Force (FATF) to re-list Pakistan in its grey list, citing failure to curb terror financing and money laundering.

India will present a strong case to the Financial Action Task Force (FATF) for reverting Pakistan to its “grey list” for failing to comply with anti-money laundering and terror financing norms, a senior government source was quoted as saying in a PTI report.

"We will be taking it up (with the FATF)," the source confirmed to the news agency when asked whether India intends to formally raise the issue with the global financial watchdog.

The move comes amid heightened tensions between India and Pakistan following a deadly terror attack in Pahalgam on April 22, which claimed the lives of 26 civilians. India has squarely blamed Pakistan for harbouring terror groups and allowing its soil to be used for planning and executing cross-border attacks.

Allegations of Fund Diversion for Arms

India has accused Pakistan of not acting against terror outfits operating from its territory and diverting funds from multilateral agencies to purchase arms and ammunition. This, officials say, violates international financial protocols and obligations under FATF guidelines.

Countries that fail to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing are placed under increased monitoring, known as the FATF grey list. Such jurisdictions are expected to resolve the identified issues swiftly within agreed timeframes.

When a country is under increased monitoring, it remains under scrutiny to demonstrate tangible progress in implementing FATF recommendations.

Pakistan was previously placed on the grey list in 2018 after it was found lacking in measures to combat money laundering and terror financing. It was removed from the list in 2022 after implementing an action plan agreed upon with the FATF.

India Also Opposed IMF Bailout Tranche

Earlier this month, India also opposed the release of a tranche of the International Monetary Fund’s (IMF) bailout package to Pakistan, citing similar concerns about the misuse of international funds.

The FATF plenary, its primary decision-making body, convenes three times a year — in February, June, and October. India is expected to bring up its concerns during the upcoming June meeting.