India is planning a diplomatic push to have Pakistan relisted on the Financial Action Task Force (FATF) grey list, according to a senior Indian official. The move comes as tensions between the two South Asian neighbours rise again. New Delhi is also preparing to oppose upcoming World Bank funding initiatives intended for Pakistan.
Pakistan was on the FATF grey list from 2018 to 2022 for failing to adequately counter money laundering and terrorist financing. The listing placed the country under increased international scrutiny, affecting its economic image and making it harder to access global financial systems and secure aid.
In October 2022, Pakistan was removed from the list after fulfilling FATF’s 34-point action plan. This included legal reforms, better coordination between agencies, and action against banned groups. The decision helped Pakistan rebuild confidence with lenders and ease financial pressure during an ongoing economic crisis.
Despite FATF being a technically non-political body, its decisions are often influenced by behind-the-scenes lobbying. India’s efforts, even if not immediately successful, could still damage Pakistan’s international standing and complicate its access to financial support.
Additionally, India has confirmed its intent to block new World Bank aid to Pakistan, though specific projects or amounts were not disclosed. The twin moves—pressuring FATF and resisting World Bank funding—highlight New Delhi’s strategy to tighten diplomatic and financial pressure on Islamabad at a time of renewed hostility.