ISLAMABAD: The International Monetary Fund (IMF) has urged Pakistan to significantly strengthen its anti-money laundering (AML) framework, expressing serious concern over the critically low number of Suspicious Transaction Reports (STRs) being filed from the country’s real estate sector.
The development came as the IMF approved the release of its fourth tranche of $1.1 billion under the Extended Fund Facility (EFF), alongside approximately $220 million under the Resilience and Sustainability Facility (RSF). Despite the disbursement, the Fund flagged persistent structural weaknesses in Pakistan’s financial monitoring architecture, particularly within Designated Non-Financial Businesses and Professions (DNFBPs).
IMF officials noted a widespread perception that significant volumes of undocumented and untaxed capital are being absorbed into the real estate market, circumventing formal financial oversight mechanisms. The Fund described the current performance of Pakistan’s DNFBP framework as unsatisfactory and called for immediate corrective measures.
In response, Pakistani authorities informed the IMF that the Federal Board of Revenue, the Financial Monitoring Unit, and the Directorate General of DNFBPs would jointly address the STR shortfall through regulatory reforms, a structured reporting framework, and mandatory registration of relevant entities.
The IMF also raised concerns over trade-based money laundering, pressing Pakistan to enhance inter-agency data sharing across customs, foreign exchange, and import payment systems to detect illicit financial flows more effectively.
Additionally, the Fund highlighted deficiencies in beneficial ownership disclosures and called for improved accuracy in the Securities and Exchange Commission of Pakistan’s corporate registry to prevent the misuse of legal entities.
On the banking front, authorities reported that non-performing loans had declined to 6.1 percent by the end of 2025, and a previously undercapitalized private bank has since completed recapitalization and restored full regulatory compliance.
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