FATF REPORT RECOMMENDS SCRUTINY OF BANK ACCOUNTS OF POLITICIANS

STRONG MEASURES SUGGESTED FOR ROOTING OUT CORRUPTION IN INDIA

By Tirthankar Mitra

Corrupt politicians and officials have been the bane of India for decades. Even as this breed embed themselves in different political outfits stashing their ill-gotten gains at home and abroad, the recent recommendations by the Financial Action Task Force (FATF) for India seeking to beef up the scrutiny of such tainted persons, is welcome. The FATF is a  global  action  force to check  money  laundering.

Calling a spade by no other name, these black sheep has been rightly dubbed to be Politically Exposed Persons (PEPs). And the recommendation of taking a long hard look into their bank accounts is a crucial step to combat corruption and enhance transparency of the financial system.

India has taken big strides in aligning with global anti-money laundering standards. In this backdrop, the FATF’s focus on domestic political figures seems to be part of a frontal attack on those bleeding the national economy.  FATF report  underlines  the  need for  addressing persistent vulnerabilities  in  the  system since  politicians and  government  officials weild  considerable political  influence.

Their financial transactions are often intertwined with public duties. Proximity to power can make them susceptible to corruption.  The risks of succumbing  to  greed always  exist. India  has  to  take  proactive   steps in  mitigating risks when the  PEPs bank  accounts are  subjected to a  tooth comb  search.

The FATF has called for more rigorous monitoring of the sources of funds in the PEPs’ bank accounts. Senior managers’ approval being recommended for opening new accounts of PEPs is a pointer to the need for heightened vigilance. It is   a    step to  prevent  abuse.  No harm in  a  double   check.

India has implemented stringent banking checks on foreign accounts   of  political figures. It is an indication of the country’s awareness of the risks these politicians pose to the financial system. FATF  report underlines  that corruption  is   deeply  rooted in  domestic  politics  in  India and  this  needs the scrutiny of  the  bank  accounts    of  Indian  politicians, officials   and  their  families.

And sooner it is done, the better. Known for their resourcefulness, these individuals can go to great lengths to hide the money which they have not earned.

The FATF recommendations have been made to ensure that the financial system is not being exploited for personal gains by some of those in positions of power. One has to mark the timing of these recommendations.  Several state elections   are round   the   corner and the  politicians  are  expected   to   spend   funds  from   their  ill-gotten   wealth.

Meanwhile, the powers that be have to face a challenge of balancing the need for transparency with the potential for misuse of these regulations post implementation. It is no easy task as the defaming a political opponent especially an honest one has a lure of its own.

Fairness and impartiality are essential pre-requisites before implementation of the FATF recommendations. Otherwise, they could be used to tarnish reputations of political opponents voicing dissent.

Recommendation of scrutiny of domestic political figures is not to be overlooked and is to be implemented forthwith. It is a significant step to ensure that the Indian financial system remains clean and robust. (IPA Service)