India has called for automatic exchange of information among all countries to deal with the menace of money laundering and terror financing. Addressing a meeting of G-20 Finance Ministers and Central Bank Governors in Washington, Finance Minister Pranab Mukherjee said that India believes that automatic exchange of information is one of the most effective ways to improve voluntary tax compliance and decrease tax evasion and there is a need to make it obligatory.

The Minister also expressed concern over the slow pace of quota and governance reforms of the International Monetary Fund (IMF). He said it is necessary to ensure legitimacy and effectiveness of the multilateral agency. Mr. Mukherjee said, India is disappointed at the pace of reforms on IMF quota and governance issues. He said, a dynamic process of reform is necessary to ensure the legitimacy and effectiveness of the Fund and the best possible means to improve governance and legitimacy is by ensuring that there is no slippage on crucial reforms.

Pointing out that the quota formula was of central importance since quotas are the main determinant of the voting power of members, Mr. Mukherjee said, efforts should be made to complete it by the target date of January 2013.

The Finance Minister said, for the emerging and developing countries, GDP is the most important variable in the quota formula and the weight of the blended GDP variable should be substantially increased in the formula.

The IMF reforms aim at increasing the voting power of the developing countries. A communique issue at the end of the meeting has called upon all nations to sign a global convention for comprehensive exchange of information to combat money laundering and financing of terrorism. The G-20 nations also supported the renewal of the mandate of Financial Action Task Force, an inter governmental body set up to frame policies to combat money laundering and terror financing.