Govt claims of making SBP amendment bill free of controversy

Govt can put an end to central bank's sovereignty by simple majority in parliament, Tarin says

ISLAMABAD: Federal Finance Minister Shaukat Tarin on Thursday said that although the International Monetary Fund (IMF) wants the State Bank of Pakistan (SBP) governor to be given immunity in legal proceedings, the government has removed unconstitutional provisions from the central bank’s amendment bill.

“We told the Fund that doing so would be against our country’s constitution and thus, have removed unconstitutional provisions from the bill,” he said.

While presenting the finance supplementary and SBP amendment bills in the National Assembly (NA), Tarin added that the SBP governor will be accountable as he will be answerable to the parliament. 

He revealed that both the SBP governor and the finance minister will discuss matters of mutual interest under the SBP’s Finance and Monetary Board, which was earlier headed only by the finance minister.

With respect to the IMF’ condition of giving autonomy to central bank, Tarin said that it was part of the PTI’s agenda to empower the institutions to work without any pressure.

“The Pakistan Tehreek-e-Insaf (PTI) does not only want to strengthen, but also give freedom and authority to institutions that will not be strong unless they are empowered,” Tarin said.

He said that there was nothing wrong with giving administrative autonomy the SBP, adding that one of the condition in the amendment bill was that the government would not be able to borrow from the central bank.

“The incumbent government has not borrowed even a single rupee during past two and half years,” he said, adding that the uncontrolled borrowing that was done by the past government, resulting in a price hike and devaluation of the local currency.

The minister maintained that the government was only giving administrative independence to the SBP while the supreme authority would be in the hand of a non-executive board that will be nominated and approved by the government itself.

He said the Board would recommend the names of governor and deputy governor to the government that will give final approval.

Similarly, he added that the SBP would also be given administrative independence so that it can pay salaries on its own.

“Today, we have presented the bills in parliament and we will sit down and talk with the opposition on this matter. If we had talked with opposition parties earlier then the whole process would have ended,” Shaukar Tarin said.

He also said that the agreement with the IMF is very important because it involves the World Bank, the Asian Development Bank (ADB) and other financial institutions. “They also help when a country has an agreement with the IMF,” he added.

The finance minister said that there is no need for a constitutional amendment for passing the SBP amendment bill. “A simple majority is needed to pass a bill through parliament. If we ever feel that the SBP is slipping out of our hands, the government will end its sovereignty by a simple majority,” he said.

The finance minister also highlighted that countries that have not given their central banks sovereignty are suffering.

 

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Shahzad Paracha
The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]

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