ISLAMABAD: The appointment of State Bank of Pakistan’s (SBP) governor from District Management Group (DMG) rather than from among the professionals having experience of core banking sector is a serious question mark about the autonomous working of the SBP.
Appointment of Tariq Bajwa as governor SBP by the ruling Pakistan Muslim League-Nawaz (PML-N) is severely hurting the autonomous working of the SBP as a regulator. Multilateral Creditors have always raised voice for making SBP autonomous and independent and not an attached department of the Finance Ministry, sources familiar with the working of SBP and the Finance Ministry revealed to Pakistan Today on Wednesday.
Incumbent governor is making decisions regarding the interest rate policy by taking dictation from Islamabad. The sources further added that there is a conflict of interest between sound banking practices and government’s financial needs. The International Monetary Fund (IMF) had also directed the government to separate monetary and fiscal policies. If the SBP gets the autonomy it is promised, it would be able to regulate the monetary and credit system of Pakistan.
IMF and World Bank (WB) had started banking sector reforms a few years back but the reforms have not been completed. The purpose of these reforms was to maintain the autonomous status of these organisations, which such appointments completely defeat.
After making the appointment of Tariq Bajwa as governor SBP, the government also appointed the Pakistan Administrative Service (PAS) officer, Tahir Shahbaz as Federal Ombudsman (FO). Furthermore, the ruling government appointed Nadeem Hasan Asif as member Federal Public Service Commission (FPSC). In the last week, the government also appointed Shahid Mehmood, a retired officer of DMG, as Executive Director (ED), Asian Development Bank (ADB).
In addition to this, Tariq Hasan and Hafiz Muhamad Yousaf have been included in the board of SBP despite having no banking experience.
While talking to Pakistan Today, Dr Ashfaq Hasan said that the government has adopted a pick and choose policy while making appointments in autonomous organisations of the country like SBP, SECP and others.
Chairman Senate Standing Committee on Finance, Revenue and Economic Affairs Saleem Mandviwala said that government has appointed an incompetent person for the post of SBP governor as he does not have a banking background. The SBP Article 10 states that government can only appoint people from banking or economics background for this position, he added.
‘This is not a political position. I am not an opponent of Tariq Bajwa but he does not have the capability to handle the affairs of SBP,” he said further.
It is also important to mention here that as many as 23 senators of opposition parties have filed an application with the Islamabad High Court (IHC) claiming Tariq Bajwa’s appointment as SBP governor is illegal and non-transparent.
The SBP Act envisages a professional and efficient system and calls for an experienced and qualified governor, however, the senators alleged that the PML-N government has all along indulged in ruthless violation of legal requirements and procedures in making appointments and filling vacancies in all key positions of state departments and institutions.
The head of the Securities and Exchange Commission is an example, who is behind bars and facing criminal charges, they added.
Till now the SBP has refused to reply to the court. The next date of the case is February 24.
