The global terror financing watchdog, FATF, on Wednesday decided to keep Pakistan in the "Grey List" as it has failed to check flow of money to terror groups like the LeT and the JeM, officials said.
The decision was taken at the Financial Action Task Force's third and final plenary held virtually due to the COVID-19 pandemic.
The plenary was held under the Chinese Presidency of Xiangmin Liu.
"The FATF plenary decided continuation of Pakistan in ''Grey List'' till its next meeting to be held in October," an official privy to the development told PTI.
The decision has been taken as Pakistan has failed to check flow of money to terror groups like Lashkar-e-Taiba (LeT) and Jaish-e-Mohammed (JeM), the official said.
The FATF decision comes on a day the US Country Reports on Terrorism slammed Pakistan as a safe harbour for "regionally focused terrorist groups" and allowing LeT and JeM to operate from its soil.
The US State Department report said Pakistan took modest steps in 2019 to counter terror financing and restrain India-focused terrorist groups from conducting large-scale attacks following the February attack on a security convoy in Pulwama in Jammu and Kashmir linked to Pakistan-based Jaish-e-Mohammed (JeM).
"Pakistan took action against some externally focused groups, including indicting Lashkar e-Tayyiba (LeT) founder Hafiz Saeed and associates in three separate terrorism financing cases.
"However, Pakistan remained a safe harbour for other regionally focused terrorist groups. It allowed groups targeting Afghanistan, including the Afghan Taliban and affiliated HQN, as well as groups targeting India, including LeT and its affiliated front organisations, and Jaish-e-Mohammed (JeM), to operate from its territory," the report said.
A strong Indian delegation with experts on money laundering and terror financing participated in the half-day FATF plenary.
With Pakistan's continuation in the ''Grey List'', it will be difficult for the country to get financial aid from the IMF, World Bank, ADB and the European Union, thus further enhancing problems for the nation which is in a precarious financial situation.
If Pakistan fails to comply with the FATF directive by October, there is every possibility that the global body may put the country in the ''Black List'' along with North Korea and Iran.
India has been maintaining that Pakistan extends regular support to terror groups like LeT, JeM and Hizbul Mujahideen, whose prime target is India, and has urged FATF to take action against Islamabad.
Pakistan was placed on the ''Grey List'' by the FATF in June 2018 and continues to be in the list since then as it has failed to comply with the tasks given by the FATF to stop terror financing.
The FATF is an inter-governmental body established in 1989 to combat money laundering, terrorist financing and other related threats to the integrity of the international financial system.
The FATF currently has 39 members including two regional organisations -- the European Commission and Gulf Cooperation Council.
India is a member of the FATF consultations and its Asia Pacific Group.