India wants to stop the $20 billion loan package that Pakistan will receive in June. India will raise the issue of funding to Pakistan in the meeting with the World Bank.
This loan package from Pakistan is part of a 10-year program named ‘Pakistan Country Partnership Framework 2025-35’. A decision on approval of the package will be taken in June.
Its objective is to improve social indicators, focus on areas like child malnutrition, promote learning poverty, climate resilience and private investment.
Apart from this, the issue of putting Pakistan back in the gray list of Financial Action Task Force (FATF) will also be raised. Sources have informed this to news agency PTI.
In 2022, FATF removed Pakistan from the grey list
In 2018, Pakistan was placed on the FATF’s grey list. Then he had given an action plan to curb money laundering and terror financing. After this, in 2022, FATF removed Pakistan from this gray list.
The source said the Indian government will put forward a strong case to the FATF to put Pakistan on the ‘grey list’ again for failing to comply with anti-money laundering and terror financing rules. FATF meets three times a year (February, June and October).
India had also opposed Pakistan’s bailout package
The Indian government had also opposed the $2.4 billion bailout package of the International Monetary Fund (IMF) to Pakistan on 9 May.
After this, IMF has put 11 new conditions before Pakistan regarding the release of the next installment of the bailout package. The new conditions include parliamentary approval for the Federal Budget, higher debt servicing surcharge on electricity bills and lifting of restrictions on used cars.
India contacted IMF regarding Pakistan’s relief package
The IMF staff-level report said rising tensions between India and Pakistan, if continued or worsened, could increase risks to the program’s fiscal, external and reform goals.
According to sources, the Indian government contacted IMF Managing Director Kristalina Georgieva regarding giving relief package to Pakistan. Georgieva was told that the Indian government is not against giving funds to any country, but this bailout has been given during a war-like situation.
Pakistan promoted terrorism with funds
It was also said that IMF has assisted Pakistan 28 times, but it used these funds to buy weapons and promote terrorism instead of improving the country’s economic situation.
Apart from this, the government has also raised the issue of assistance being received by Pakistan from IMF with the Foreign Ministers of Germany, Italy and France. Indian embassies are contacting all IMF counterparts for help in this issue.
IMF defended its bailout package given to Pakistan
Meanwhile, IMF has defended its bailout package given to Pakistan. IMF said that Pakistan has fulfilled all the funding conditions, due to which this package has been approved.
On 9 May 2025, when the IMF board meeting was being held regarding the approval of this package, India had objected to the granting of the loan and did not participate in the voting.
India had said that the package should be reconsidered, because Pakistan can use this money to promote terrorism. However, IMF did not accept this.
What did IMF Communication Department Director Julie Kojak say?
Speaking to BT TV, IMF Communication Department Director Julie Kojak said, ‘I want to tell you three important things to help you understand this.
IMF’s financing is intended only to resolve balance of payments issues. All Extended Fund Facility (EFF) disbursements to Pakistan go directly to the Central Bank Reserve.
These funds are not used for government budget financing. There is no limit on giving loans from the central bank to the government. The program includes structural reforms to improve fiscal management
This is the highest annual surplus transfer ever. According to experts, one reason for the sharp rise in surplus amount is the Reserve Bank’s earnings from Forex holding. Experts said that higher than expected surplus is good news for the central government as it will support the Centre’s liquidity surplus and subsequent expenditure.
This will help the government to reduce its fiscal deficit. It will be easier for the government to spend money on new schemes. Compensation for the decline in revenue collection after the missed disinvestment target.
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