Pakistan Built Raast to Fight Cash. Hawala Found a Way In

  FATF’s Oman case shows how an underground remittance network can use a legitimate domestic payment rail without compromising it.



I stopped at Box 9 on page 35 of FATF’s September 2026 report. One sentence named Pakistan’s instant payment system. Raast and Digital Hawala suddenly met in an Oman case where suspected hawaladars exploited fee-free transfers to Pakistan through channels such as Raast. The tracked flow reached about $72,293 over one year, but the mechanism mattered more to me than the sum.

ATF’s Oman case shows how a hawala network can use legitimate domestic payment rails in Pakistan, while SBP maintains that Raast itself remains a secure domestic payment system.

SBP answered quickly. Its 4 September clarification rejected the claim that FATF had identified Raast itself as a money-laundering mechanism or questioned the integrity of the payment infrastructure. I agree with that narrow correction. FATF did not accuse Raast of a technical failure, yet its case still shows how an underground remittance network can use a legitimate domestic rail.

Raast and Digital Hawala: What FATF Actually Found

FATF did not conduct a new evaluation of Pakistan. Germany and Saudi Arabia co-led the global study. Pakistan contributed through the wider project team, while the report drew on questionnaires from many jurisdictions. Box 9 records a specific Oman-to-Pakistan case rather than a finding against Raast as a system.

Omani authorities began with a market signal. A reporting entity noticed a sudden fall in remittances through one corridor, which pushed investigators toward a WhatsApp group called “XX Money Exchange.” Suspected hawaladars offered rates below the formal market with little or no fee. FATF says the scheme exploited lower-cost channels in destination countries, including fee-free transfers to Pakistan through Raast.

SBP’s green clarification graphic sharpened the dispute. The central bank said FATF had neither identified Raast as a money-laundering mechanism nor raised a specific concern about the integrity of Raast infrastructure. SBP also stressed that Raast handles domestic payments and does not currently carry cross-border transfers. Its statement then acknowledged the broader point: FATF discusses how underground banking networks can misuse formal banking and payment channels.

I think both documents can stand together. SBP answers whether FATF condemned the payment system itself, and the answer is no. FATF asks a different operational question through its case study: can a hawala network use a lawful domestic payment rail inside an unlawful or unlicensed cross-border arrangement? The Oman case says that possibility deserves attention.

Pakistan Built Raast to Pull Payments Into Formal Channels

SBP launched Raast P2P in February 2022 to provide instant and free person-to-person payments. The aim was inclusion. Customers could send funds through an IBAN or a mobile number linked as a Raast ID. Low friction formed part of the product design from day one.

Raast then grew far beyond an experimental service. SBP recorded 645.7 million Raast transactions worth Rs18.469 trillion in Q2 FY26, compared with 295.7 million worth Rs6.364 trillion a year earlier. P2P transfers produced most of that activity. The scale changes the AML question because a suspicious transfer now sits inside a very large flow of ordinary payments.

Raast metric	Q2 FY25	Q2 FY26	Year-on-year change
Total transaction volume	295.7 million	645.7 million	+118%
Total transaction value	Rs6.364 trillion	Rs18.469 trillion	+190%
P2P transaction volume	293.7 million	603.0 million	+105%
P2P transaction value	Rs6.137 trillion	Rs15.687 trillion	+156%

Percent changes calculated from SBP quarterly payment-system data.

SBP did not treat cheap payments as permission to loosen controls. Risk still governed limits. Its March 2022 instruction let regulated institutions set Raast limits according to customer risk and relevant AML/CFT requirements. The circular also demanded strong internal controls against fraud and misuse.

From I. I. Chundrigar Road, the Gap Looks Familiar

At my desk on I. I. Chundrigar Road, payment messages often reduce a complicated commercial relationship to structured fields on a screen. The message may look clean. A bank still has to ask who sent the money and why the transaction makes economic sense. Years around SWIFT messaging have taught me to separate the integrity of a network from the legitimacy of a payment using it.

SWIFT offers the easiest comparison. A suspicious payment can pass through a sound messaging network without proving that criminals compromised SWIFT. Compliance staff examine the customer relationship because the message format cannot reveal every commercial fact behind the transfer. Raast faces a similar boundary at the domestic end.

The Oman case makes that boundary visible. A customer can deal with an informal remitter abroad, while a counterpart in Pakistan arranges the beneficiary payment through an account connected to Raast. Raast then sees a domestic transfer. The cross-border economic obligation can remain outside the Raast message, and counterparties may settle it through a separate arrangement.

FATF’s wider report supports that distinction. Its analysis says digital payment tools can assist customer payments while underlying settlement often occurs off-platform through cash or trade. Nearly 70 percent of responding jurisdictions also reported growing use of new technology in what FATF calls “digital hawala.” Formal rails therefore do not automatically replace informal finance. Informal operators can attach themselves to formal rails instead.

Hawala Can Borrow the Efficiency of Formal Finance

Pakistan’s payment policy has tried to move more everyday transactions into formal digital channels. The economic logic is clear. Lower fees give ordinary users a reason to leave cash behind, but hawala does not need to defeat the formal system. An informal operator can use parts of that system while keeping the cross-border relationship somewhere else.

Low cost creates the awkward incentive. A migrant worker sees a better exchange rate and a cheaper remittance service. The hawaladar sees a lower payout cost inside Pakistan. Both benefit from the efficiency of the domestic rail, although only one side may understand the wider arrangement.

Speed adds another problem. Instant settlement leaves less time for manual review, so banks must detect patterns across accounts rather than wait for one obviously suspicious transfer. A single Raast credit may resemble a family payment. Repeated credits followed by rapid onward transfers may tell a different story when a bank compares them with the customer’s normal activity.

FATF treats digital technology as an enabler for other hawala settlement methods. That matters. The report says mobile money can support near-instant customer transfers while operators settle underlying obligations elsewhere. I read the finding as a warning against assuming that digitisation automatically exposes the whole economic relationship behind a domestic payment message.

Oman Saw a Corridor. SBP Saw a Domestic Rail

Omani investigators started from remittance behaviour. A formal channel lost business suddenly, which gave investigators a reason to follow the corridor and inspect the social-media activity around it. Their evidence focused on the network connecting customers to an unlicensed service. FATF then used the case to show how informal operators can combine digital tools with regulated payment infrastructure.

SBP looked at another part of the same chain. Its clarification defended Raast against the claim that FATF had called the system a money-laundering mechanism. Public trust matters. Yet SBP’s own statement accepts that underground banking networks can misuse legitimate payment channels.

I would not frame the episode as FATF versus SBP. The two institutions examine different layers. Oman sees a cross-border remittance network, while Pakistan sees a domestic transaction rail that carries lawful payments at national scale. The harder supervisory problem begins when evidence from those layers sits in different jurisdictions.

Price changes the incentives. A customer may choose the informal service because the price looks better. The operator earns a margin by exploiting cheaper payout channels and exchange-rate differences, exactly as FATF describes in the Oman case. Better payment infrastructure can therefore reduce costs for lawful users while also lowering one operating cost for an unlawful service.

The Blind Spot Sits Between Two Records

A Pakistani bank can see the Raast transfer. Omani investigators may hold the foreign communication that gives that transfer meaning. Neither record alone explains the whole economic arrangement, especially when the domestic payment looks normal and the offshore relationship sits outside the bank’s field of view.

I find that gap more important than the argument over an unfair headline. SBP is right on Raast. FATF still shows how underground finance can enter formal payment channels without damaging the rails themselves. The unresolved question concerns how quickly regulators can connect records across borders.

One record may sit in Karachi. Another may sit in Muscat, attached to a WhatsApp group rather than a payment message. By the time investigators join the two, the next payout may use another account. Raast will still see a domestic payment.