New Delhi: India is set to push the Financial Action Task Force (FATF) to re-add Pakistan to its grey list, citing renewed concerns over state-sponsored cross-border terrorism and the misuse of international financial aid, a top government source said on Friday. This move follows India's opposition to recent IMF and upcoming World Bank funding for Pakistan.

IMF defends Pak bailout

Despite India's objections, the International Monetary Fund (IMF) approved the disbursement of about $1 billion to Pakistan on May 9 under its ongoing Extended Fund Facility (EFF). The IMF on Thursday defended the payment as part of a standard review process based on Pakistan’s fulfillment of programme targets and conditions.

"Our Board found that Pakistan had indeed met all of the targets. It had made progress on some of the reforms, and for that reason, the Board went ahead and approved the program" said IMF's communications department director, Julie Kozack

India had urged the IMF to reconsider, pointing to Pakistan’s support for terror activities, particularly following the April 22 attack in Pahalgam, Kashmir, which killed 26 tourists and led to India’s Operation Sindoor targeting terror bases in Pakistan and PoK.

India's finance ministry expressed concerns that the fresh IMF funds, part of a $7 billion programme could be diverted to support terrorism. New Delhi abstained from the IMF vote and formally protested during the board’s review of the $1 billion EFF and an additional $1.3 billion under the Resilience and Sustainability Facility (RSF). India warned that rewarding such behaviour sends a dangerous message to the international community and exposes global financial institutions to reputational risk. The IMF acknowledged India’s concerns but noted its decisions were guided by procedural and technical criteria.

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