According to The Economic Times of India, the Reserve Bank of India (RBI), India’s Central Bank and Regulatory Body may lift sanctions taken against the Mauritius jurisdiction in February.
In February 2021, the RBI has restricted investment from jurisdictions identified by Financial Action Task Force (FATF) as jurisdictions with significant weaknesses in their anti-money laundering and terrorist financing frameworks. After Mauritius was placed in the list of jurisdictions under increased monitoring (Grey list), the RBI issued a restriction on investment stating that no entity coming from a non-FATF compliant country can hold more than 20% of voting rights in a non-banking financial company (NBFC) based in India. This was described by industry experts as a major blow to Mauritius status as the ideal platform for routing investment to and from India.
Mauritius’s exit from the FATF Grey list is expected to be announced officially at the end of this week’s FATF plenary session on Thursday.
Yesterday, Monday, October 18, The Economic Times of India, published a front cover story on Mauritius’ potential exit. Following a positive report submitted by the International Co-operation Review Group (ICRG), recommending that Mauritius should be removed from the Grey list, The Economic Times stated that Mauritius’ exit may have a dual impact in India.
- RBI may lift curbs on ownership and control by entities in Mauritius investing in Indian NBFCs.
- Lesser scrutiny on beneficial ownership of Mauritius’ based investment vehicles destined to India as Foreign Portfolio Investment and Foreign Direct Investment.
