The International Monetary Fund (International Monetary Fund) has called on Pakistan to tighten its anti–money laundering framework, particularly in the real estate sector, as part of its latest review of the country’s economic reform programmed.
The recommendations came alongside the approval of the next $1.1 billion tranche for Pakistan under the Extended Fund Facility, reflecting continued engagement between the lender and Islamabad on financial reforms.
The IMF expressed concern over the low number of suspicious transaction reports being filed by designated non-financial businesses and professions. It highlighted the real estate sector as an area of particular risk, where large volumes of potentially undocumented funds are believed to circulate.
In response, Pakistani officials informed the IMF that the country is updating its National Risk Assessment in coordination with the National AML/CFT Authority. They also reaffirmed commitments to strengthen oversight of non-financial sectors, including real estate agents, to improve preventive controls against illicit financial flows.
A key part of the reform agenda includes improving the accuracy of beneficial ownership data, especially within the corporate registry maintained by the Securities and Exchange Commission of Pakistan. The aim is to prevent the misuse of companies for concealing ownership structures or facilitating illegal transactions.
The IMF also urged Pakistan to enhance monitoring of trade-based money laundering risks. Authorities have agreed to improve data sharing between agencies handling foreign exchange reporting, import payments, and customs records to better identify suspicious financial activity.
Officials said the Financial Monitoring Unit will continue to share financial intelligence with relevant institutions, while tax authorities and regulators are expected to strengthen reporting obligations for sectors considered vulnerable to money laundering.
The IMF also reviewed risks in Pakistan’s banking sector, including the level of non-performing loans. Pakistani authorities reported that bad loans had declined to 6.1 percent by the end of 2025, with commercial banks outlining plans to further reduce stressed assets.
The State Bank of Pakistan (State Bank of Pakistan) told the IMF it will maintain close supervision of financial institutions and monitor progress on these restructuring plans to improve sector stability.
Officials also informed the IMF that a private bank previously identified as undercapitalized in March 2025 has completed a multi-stage recapitalization process and is now meeting all regulatory capital requirements.
The central bank added that it will ensure all banks maintain adequate capital buffers going forward and that prompt corrective action will be taken against any institution showing signs of falling below required thresholds.
