PM forms committee to review proposal allowing dual nationals to become SBP governor

Prime Minister Shehbaz Sharif has established a committee to review a proposal allowing dual nationals to be appointed as the governor and deputy governor of the State Bank of Pakistan (SBP).

According to a news report, the cabinet decided to defer the approval of the SBP Amendment Bill and instead formed a committee to review the proposed changes. 

The finance ministry had suggested several amendments to the SBP Act, including a proposal to allow dual nationals to be appointed as governor and deputy governor of the central bank. The law ministry had already vetted the proposed changes.

The issue of dual nationality appointments is particularly relevant as one of the SBP’s deputy governors, Dr. Inayat Husain, whose term ended on November 8, holds dual nationality. The government is interested in retaining him for a new five-year term. 

Another leading candidate for the deputy governor position, Dr. Saeed Ahmad, also holds dual nationality. 

Under the current law, the federal government appoints deputy governors based on recommendations from the SBP governor in consultation with the finance minister.

The amendment to Section 13 of the SBP Act, which currently disqualifies individuals holding dual nationality from serving as governor, deputy governors, or directors, is one of the key proposals. 

The finance ministry’s draft amendment aims to remove the restriction on dual nationals, but this has sparked debate among cabinet members. Some ministers expressed concerns that dual nationals might return to their countries of origin once their terms end.

Finance Minister Muhammad Aurangzeb, who renounced his Austrian nationality upon assuming office, argued in favor of allowing dual nationals to serve as governor or deputy governor.

Some cabinet members suggested that the government should consider exempting certain key positions from the dual nationality ban.

The prime minister instructed the Cabinet Division to thoroughly review the proposed amendments through the newly formed committee before bringing them back for cabinet approval.

The prime minister also instructed the Cabinet Division to ensure that Minister of State for Finance, Ali Pervaiz Malik, is consulted on all cabinet-related economic matters. 

This directive followed Malik’s objection during the cabinet meeting over not being consulted by the finance ministry regarding a proposal to amend the SBP Act, which was subsequently deferred. Malik emphasized that he should have been involved in the decision-making process before the finance ministry submitted the summary for the amendment.

As per the Rules of Business of 1973, the federal minister is required to approve and authorize the submission of summaries to the cabinet. Malik’s viewpoint was that without prior consultation, it would be difficult for him to support such summaries.