KARACHI: Pakistan’s central bank on Friday rejected reports that a global financial crimes watchdog had identified the country’s Raast instant payment system as a channel for money laundering, saying the claims misrepresented the findings of a report on underground banking and hawala networks.

The clarification followed the release this week of a Financial Action Task Force (FATF) report examining the growing use of underground banking and hawala networks for professional money laundering around the world. Raast was mentioned in the report in connection with a Pakistan-linked case study.

“The FATF report neither identifies Raast as a money-laundering mechanism nor raises any specific concern regarding the integrity of the Raast payment infrastructure,” the State Bank of Pakistan (SBP) said in a statement.

“Any portrayal suggesting otherwise misrepresents the context and findings of the report.”

Raast is Pakistan’s instant digital payment system, operated by the central bank to facilitate domestic payments and transfers. SBP said the system does not currently facilitate cross-border transfers.

The FATF report examines how underground banking and hawala networks can intersect with formal financial systems and be exploited by criminal groups. The watchdog said more than 80 percent of jurisdictions that reported to it identified such networks among the main channels or techniques used for professional money laundering.

Pakistan was placed on the FATF’s “grey list” of jurisdictions under increased monitoring in June 2018 over deficiencies in its systems to combat money laundering and terrorist financing.

It was removed in October 2022 after completing two action plans covering 34 items, with the watchdog citing “significant progress” in strengthening the effectiveness of its anti-money laundering and counterterrorism financing regime.

SBP said it remained committed to protecting the integrity of Pakistan’s payment systems and strengthening safeguards in line with international standards.