What is CFT in banking?

Combating the Financing of Terrorism is known by the term CFT. The act of funding terrorism refers to giving money to individuals or groups who use force or violence or acts of terror. They use it to achieve their political, religious, or economic objectives. So let me guide you more about the CFT full form in banking.

What is the meaning of CFT?

A group of government policies are known as Combating the Financing of Terrorism (CFT). They are designed to limit access to finance and banking services for those who the government considers to be terrorists. Law enforcement might be able to stop some terrorist operations by figuring out from where the money is coming to fund those actions. These terrorists may receive financial support from reputable religious or cultural institutions, as well as from illicit means like the smuggling of narcotics. Such illicit funds assume the appearance of legitimate funds through money laundering. Consequently, terrorism funding and money laundering are frequently connected. 

When law enforcement officials identify and stop money laundering operations, it eliminates the main source of funding used to fund terrorism. As a result, CFT places a high value on fighting money laundering. Terrorist funding is often known as "reverse money laundering" since it uses finances intended for breaking laws rather than money obtained through crime. Now you know what is CFT in banking.

What are the objectives of CFT?

• It could focus on a range of organisations, including banks, NGOs, and companies, as well as a range of tasks. It also includes recording, monitoring, and regulating.

• The majority of CFT regulations aim to detect and restrict the movement and illegal activities of funds. 

• They can frequently be carried out as normal money transfers but are actually being used to support terrorist activities.

• The Financial Action Task Force (FATF), an alliance of 37 nations is the main organisation guiding CFT. It collaborates to establish policies and exchange information.

You are now aware of the CFT full form in banking.