IMF urges Pakistan to strengthen oversight of real estate transactions

The International Monetary Fund (IMF) has urged Pakistan to strengthen oversight of suspicious financial transactions in the real estate sector, expressing concern over the low number of suspicious transaction reports generated from the industry, sources said.

According to sources, the IMF has called for immediate measures to curb the growing trend of trade-based money laundering and to address weaknesses in the exchange of beneficial ownership information.

The lender has also raised concerns regarding financial oversight, anti-money laundering mechanisms, and the banking sector in Pakistan, the sources added.

The IMF observed that the number of suspicious transaction reports submitted by designated non-financial businesses and professions (DNFBPs) in Pakistan remains extremely low.

Sources said the IMF is particularly concerned that a significant portion of undocumented and black money is being invested in the real estate sector.

They added that the Federal Board of Revenue (FBR) has also conducted raids on housing societies over allegations of concealed sales and undeclared income.

According to sources, the FBR has established a DNFBP framework to monitor the real estate sector, under which suspicious transaction reports are prepared and forwarded to the Financial Monitoring Unit (FMU).

However, the IMF has reportedly termed the performance of the DNFBP monitoring system unsatisfactory, sources said.