The State Bank of Pakistan (SBP) has rejected interpretations suggesting that the Financial Action Task Force (FATF) identified Raast as a money laundering mechanism, clarifying that the report did not raise concerns about the integrity of Pakistan’s instant payment system. The clarification follows references to Raast in a FATF and Organisation for Economic Co-operation and Development (OECD) joint fact finding report examining underground banking and hawala networks. According to the State Bank of Pakistan, any interpretation that directly links the Raast payment network itself to money laundering misrepresents the findings and context of the report.
The clarification came after a case discussed in the FATF and OECD report involving a hawala network operating between Oman and Pakistan. The network reportedly used digital payment channels, including Raast, to facilitate domestic transfers. The State Bank of Pakistan emphasized that the mention of Raast in the report should not be interpreted as an identification of the payment system itself as a money laundering mechanism. Instead, the regulator stated that Raast was referenced as a legitimate domestic payment channel that was used within the context of activities associated with the hawala network.
The FATF fact finding report does mention Raast among payment channels that can be exploited because of their low cost for remittance related transactions. The reference appears on page 35 of the report. However, the State Bank of Pakistan said the report does not identify Raast as a money laundering mechanism and does not raise any specific concerns regarding the integrity or security of its payment infrastructure. The distinction is important because the payment system can be used as a channel for domestic transactions without the system itself being characterized as an illicit financial mechanism.
The State Bank of Pakistan further clarified that Raast currently supports domestic payments and does not provide a mechanism for cross border transfers. The regulator maintained that Raast’s role in the case referenced by the report should therefore be understood within the broader context of domestic transfers associated with an identified hawala network. The State Bank of Pakistan’s position is that the reference to the payment system does not amount to a finding that Raast itself facilitates money laundering.
The clarification also highlights the difference between the misuse of a legitimate financial or payment channel and the integrity of the underlying payment infrastructure. Digital payment systems can potentially be used by individuals or networks in connection with transactions that are subject to financial crime concerns, but the State Bank of Pakistan said this should not be taken as evidence that Raast itself is a money laundering mechanism. According to the regulator, the FATF report did not raise a specific concern about the integrity of Pakistan’s instant payment system.
Raast is Pakistan’s instant payment system and was mentioned in the FATF report in the context of payment channels that can be exploited for their low cost. The State Bank of Pakistan has therefore sought to clarify the context of the reference and reject interpretations that portray Raast itself as being linked to money laundering. The regulator reiterated that Raast is a legitimate domestic payment channel and currently does not support cross border transfers, while the case cited by the FATF involved the use of digital channels for domestic transfers by a hawala network operating between Oman and Pakistan.
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