FATF is an inter-governmental body that sets standards, and develops and promotes policies to combat money laundering and terrorist financing for countries across the world.
With a substantial improvement in India's regulatory provisions, FATF has also decided to remove the country from its regular follow-up process for determining its compliance to for anti-money laundering and countering financing of terrorism (AML/CFT) regulations.
The move would help India get greater support from international authorities in its fight against black money and check the illicit flow of funds from and to the country.
In its latest report on India, FATF said it has "recognised that India had made significant progress in addressing deficiencies identified in its mutual evaluation report (of June 2010) and decided that the country should be removed from the regular follow-up process".
India was earlier placed in the regular follow-up process for mutual evaluation purposes because of partially compliant (PC) ratings on certain core and key Recommendations.
"Since the publication of the mutual evaluation report (in June 2010), India has been reporting back to the FATF on a regular basis on the progress made in the implementation of its Action Plan to strengthen India?s AML/CFT System.
"India has made significant progress with regard to the implementation of this action plan," FATF said.
Among various improvements in the past three years, India has rectified "nearly all of the technical deficiencies identified with respect to the criminalisation of money laundering and terrorist financing and the implementation of effective confiscation and provisional measures".
Besides, India has substantially addressed the technical deficiencies identified in relation to customer due diligence and other preventive measures, FATF said.