SBP Rejects Claims Linking Raast To Money Laundering

The State Bank of Pakistan (SBP) has dismissed reports claiming that the Financial Action Task Force (FATF) identified Raast as a channel for money laundering, clarifying that the FATF report neither labels the payment system as a money-laundering mechanism nor expresses concerns about the integrity of its infrastructure.

In a clarification, the central bank said it had taken notice of a misleading social media headline suggesting that FATF had flagged Raast as a channel used for money laundering.

The SBP stated that the FATF report does not identify Raast as a money-laundering mechanism and does not raise any specific concerns about the integrity of the Raast payment infrastructure. It said claims suggesting otherwise misrepresented the context and findings of the report.

According to the central bank, the FATF report discusses the possible misuse of formal banking and payment systems by underground banking and hawala networks operating across various countries and jurisdictions.

The SBP clarified that Raast was mentioned only as a legitimate domestic payment channel used for making payments and transferring funds within Pakistan.

The central bank also stressed that Raast does not currently support cross-border transfers.

The SBP reaffirmed its commitment to protecting the integrity of Pakistan’s payment infrastructure and said it would continue monitoring the system and strengthening safeguards in accordance with international standards.

The clarification came after reports concerning a joint FATF-OECD study that examined an Oman-based hawala network involved in unlicensed cross-border remittances to Pakistan through WhatsApp, mobile-linked transfers and e-wallets.

The network attracted attention after a reporting entity observed a sudden fall in customer remittances through certain corridors. Further investigation uncovered a WhatsApp group called “XX Money Exchange”, reportedly operated by foreign nationals providing foreign exchange and remittance services to expatriate communities in Oman.

The report stated that hawaladars offered exchange rates below formal market levels while charging little or no fees. Customers supplied funds either in cash or through mobile-linked transfers, while e-wallets were used to coordinate equivalent payments in the destination country.

The FATF-OECD report said the arrangement exploited lower-cost remittance options available in destination countries, including fee-free transfer channels to Pakistan, along with exchange-rate differences offered by certain digital wallet and payment providers.