Real estate's fictitious file system.

Pakistan's real estate sector is into transacting plot files that are neither registered with the pertinent government institutions nor bear any cogency in the eyes of the law. Plot files, therefore, function as a parallel currency in the country, causing gross violations of the Pakistan Currency Act 1950.

The submitted files and open files are intended to fill the deep pockets of developers and dealers. A submitted file bears the name of the holder and is subject to procedural transfer. The developers thus earn huge amounts of money under the head of transfer fees.

Open files exchange hands in a hassle-free manner. The one who holds the file is actually the owner. You become the owner even if you have a stolen one. This is the worst form of parallel currency, against which the investor gets nothing but a scanty promise. The authorities are beating around the bush. Who would induce the State Bank of Pakistan (SBP) to take action against such monetary malfunctioning?

Unrecorded property files give rise to overselling. Under this filthy practice, the developers usually sell more than available files. For instance, the developers may sell 1,500 imaginary files against a piece of land that fits 1,000 plots. The oversold files are then bought back under the name of affidavit files.

A developer may sell 1,500 imaginary files against a piece of land that can fit 1,000 plots - the oversold files are then repurchased under the guise of affidavit files

The developers further exploit public money under treacherous concepts of adjustment, buy-back and merging. Reselling is yet another phenomenon that validates this illicit business, giving rise to the concealment of the exact trail.

However, the SBP has not yet taken notice of the illegitimate property files that freely circulate in the economy as so-called legal tender money. Development companies are in the practice of stapling a clean currency note - usually a denomination of Rs 100 - with a piece of paper that assumes no legit identity. It prompts maltreatment of currency notes, which is punishable under promulgated sections of the Pakistan Penal Code.

Since most of the business of plot files is conducted in cash, it promotes the economy of unrecorded money. Firstly, it poses challenges in calculating the exact volume of the economy. Secondly, it encourages tax evasion. And thirdly, it instigates faulty functioning of the economic policies. Being liquid in nature, plot files are exchanged for cash...

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