India’s innovative cyber fraud reporting system has successfully thwarted over ₹600 crore from reaching online fraudsters, according to a recent report from the global anti-money laundering and terrorist financing watchdog. Launched in April 2021, the Citizen Financial Cyber Fraud Reporting and Management System (CFCFRMS) has proven to be a model of “good practice,” effectively preventing illicit financial flows from cyber frauds, as highlighted in the Financial Action Task Force (FATF) report released on November 9.
The FATF report commends the CFCFRMS for its high effectiveness in preventing fraudulent transactions from falling into the hands of fraudsters. Developed by the Indian Cyber Crime Coordination Centre (i4C), an arm of the home ministry, this online system facilitates the quick reporting of financial cyber frauds and hinders the flow of fraud proceeds across various financial sectors. The collaborative effort includes law enforcement agencies from all states and union territories, along with 243 financial entities such as banks, virtual wallets, payment aggregators, gateways, and e-commerce platforms. These entities work together seamlessly to take immediate action on complaints reported through CFCFRMS.
Former chief of the Enforcement Directorate, Karnal Singh, praises the CFCFRMS initiative, emphasizing its significance in tracing and recovering money swiftly, instilling confidence among citizens in the government’s proactive efforts.
The FATF report also outlines the federal agency’s actions against money laundering through shell companies and the use of virtual assets over the past few years. In the context of the Enforcement Directorate’s investigation into loan apps, the report notes the agency’s success in identifying and freezing proceeds of crime amounting to ₹86.5 crore held in various shell entity bank accounts.
Furthermore, in a separate report addressing the financing of non-profit organizations involved in terror activities, the FATF, without explicitly naming any country, advises member countries to be cautious about the potential impact of measures on legitimate non-profit organization (NPO) activities. The report emphasizes that actions against NPOs suspected of involvement in terrorist financing should prioritize investigation and cessation of such activities while respecting the rule of law and minimizing adverse effects on innocent beneficiaries of NPOs.