The International Monetary Fund has urged Pakistan to strengthen anti-money laundering controls in the real estate sector and improve monitoring of suspicious financial activity as part of its latest review under the Extended Fund Facility program.
The recommendations came as the IMF approved the release of the next $1.1 billion tranche for Pakistan under the loan program.
The lender expressed concern over the low number of suspicious transaction reports being filed by designated non-financial businesses and professions, particularly within the real estate sector, where authorities suspect significant volumes of undocumented money may be circulating.
Pakistani officials informed the IMF that the country is updating its National Risk Assessment in coordination with the National AML/CFT Authority to improve oversight of non-financial sectors, including real estate agents and related businesses.
As part of the reform agenda, the government has also committed to improving beneficial ownership disclosures, particularly within the corporate registry maintained by the securities regulator, to reduce the misuse of legal entities for hiding ownership or facilitating illicit financial activities.
The IMF further called on Pakistan to strengthen measures against trade-based money laundering by improving coordination and data sharing among agencies responsible for foreign exchange reporting, customs records, and import payment monitoring.
Officials said the Financial Monitoring Unit will continue sharing financial intelligence with relevant institutions, while regulators and tax authorities are expected to tighten compliance and reporting standards in sectors considered vulnerable to money laundering risks.
The IMF review also examined the health of Pakistan’s banking sector, including the level of non-performing loans. Pakistani authorities told the lender that the ratio of bad loans had declined to 6.1 percent by the end of 2025 and that commercial banks had prepared plans to further reduce impaired assets.
The State Bank of Pakistan assured the IMF that it would continue close monitoring of banks and ensure lenders maintain adequate capital buffers.
Officials also informed the lender that a private bank identified as undercapitalized in March 2025 had completed a recapitalization process and is now compliant with regulatory capital requirements.
