The International Monetary Fund (IMF) has called on Pakistan to enhance reporting of suspicious financial transactions in the real estate sector, strengthen oversight of trade-based money laundering, and improve transparency of beneficial ownership data to curb the misuse of legal entities, according to The News.
The remarks come as the IMF approved the release of the fourth tranche worth $1.1 billion under Pakistan’s Extended Fund Facility (EFF), following its latest review of the country’s economic and financial reform programme.
According to official sources, the IMF noted a relatively low number of Suspicious Transaction Reports (STRs) being generated by designated non-financial businesses and professions (DNFBPs), particularly those linked to real estate agents and property-related activities. The Fund raised concerns amid growing perceptions that untaxed and illicit funds are being parked in the country’s property sector.
The Federal Board of Revenue (FBR) has recently conducted raids on two major real estate societies over alleged concealment of sales and income. However, the extent of evidence collected during these operations has not yet been disclosed.
Under existing anti-money laundering mechanisms, DNFBPs are required to report suspicious transactions to the Financial Monitoring Unit (FMU), similar to obligations placed on banks. The IMF observed that compliance levels in this segment remain weak, prompting calls for stronger enforcement and reform.
The Pakistani authorities briefed the IMF on updates to the National Risk Assessment (NRA) and coordination efforts under the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework. Islamabad reiterated its commitment to improving monitoring systems, enhancing reporting compliance, and strengthening beneficial ownership records through the Securities and Exchange Commission of Pakistan’s central registry.
The IMF and Pakistani authorities have agreed to intensify efforts to address gaps in reporting, particularly by requiring real estate and other DNFBP entities to register properly within the regulatory framework and improve submission of STRs.
The Fund also highlighted risks linked to trade-based money laundering during the recent review discussions. In response, the State Bank of Pakistan (SBP) has introduced a framework to assist authorised dealers in identifying and monitoring such risks across customer transactions, imports, and financial services.
Both sides agreed to strengthen inter-agency data sharing between customs authorities, the FMU, and foreign exchange regulators to better track import payments and trade flows.
In the banking sector, the IMF raised concerns over non-performing loans (NPLs), noting that their ratio had declined to 6.1% by the end of 2025. The SBP assured the Fund that it is actively monitoring banks and implementing plans to reduce NPL stocks and improve financial stability.
Officials also confirmed that one private bank identified as undercapitalised in March 2025 has since been brought into compliance following a multi-step recapitalisation plan. The central bank said it will continue to enforce capital adequacy requirements and take corrective action where necessary.