The federal government has agreed to grant absolute autonomy to the State Bank of Pakistan (SBP), whereas the federal cabinet will take up the SBP Amendment Bill for approval in its meeting today.
According to a report by the Express Tribune, the central bank’s primary objective under the SBP Amendment Bill, 2021, would be to ensure domestic price stability as it would be free from the responsibilities of supporting economic growth and providing budgetary loans to revive the stalled International Monetary Fund (IMF) programme.
The bill states that supporting economic policies has been declared as “tertiary objective” of the central bank, while the National Accountability Bureau (NAB) and the Federal Investigation Agency (FIA) cannot investigate the SBP governor, deputy governors, its executives and board and committee members.
Former officials have also been provided with immunity from NAB and the FIA.
Similarly in another major proposal, the Monetary and Fiscal Policies Coordination Board has been proposed to be abolished, with a view to ending “risk of undue political influence over the SBP’s monetary policy”, according to the finance ministry. The
The bill also proposes the abolition of SBP’s powers to run quasi fiscal operations.
Commenting on the development, Bank of Punjab President and CEO Zafar Masud said, “Some of the clauses are an absolute must. IMF or no IMF.”
Taking to Twitter, he said “This should be done for all PSEs”.
Some of the clauses are an absolute must. IMF or no IMF. In fact, this needs to be done for all PSEs. These’re minimum amendments for smooth functioning of any PSE; hope it’s a harbinger of change in all public sector corporations @AqdasAfzal @Amir_masood73
— Zafar Masud (@zafar_masud) March 9, 2021