On May 12, 2026, the International Monetary Fund (IMF) urged Pakistan to enhance its reporting of suspicious transactions in the real estate sector. This call to action was part of the approval for the release of a $1.1 billion tranche under the Extended Fund Facility (EFF). The IMF identified a significant shortfall in the number of Suspicious Transaction Reports (STRs) generated by designated non-financial businesses and professions (DNFBPs), raising concerns about the potential parking of untaxed and illicit funds in the sector.
The Federal Board of Revenue (FBR) has recently conducted raids on two major real estate societies to investigate allegations of income concealment. While the outcomes of these raids are still pending, the IMF has emphasized the need for a more robust institutional mechanism to monitor and report suspicious activities, akin to the systems used by banks.
Efforts to combat trade-based money laundering (TBML) have also been highlighted, with the State Bank of Pakistan (SBP) publishing a framework in August 2025 to assist authorized dealers in assessing TBML risks. The IMF and Pakistani authorities have agreed to bolster interagency data sharing to address these risks, focusing on forex reporting, import payments, and customs data.
The IMF also raised concerns about non-performing loans (NPLs) in Pakistan’s banking sector. As of the end of 2025, the NPL ratio had decreased to 6.1%, and the SBP assured continued monitoring and action plans to maintain the health of the banks. A private sector bank identified as undercapitalized in March 2025 has since been recapitalized under SBP’s guidance.
The Pakistani government remains committed to improving the accuracy of beneficial ownership information and enhancing the effectiveness of anti-money laundering and combating the financing of terrorism (AML/CFT) measures. This commitment is crucial for preventing the misuse of legal entities and ensuring compliance with international standards.
Published in SouthAsianDesk, May 13, 2026
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