ISLAMABAD - Tariq Bajwa on Friday assumed charge of Governor State Bank of Pakistan (SBP) after the president appointed him as new head of the central bank for a period of three years.

Analysts see the appointment as a move likely to raise concerns that the independence of the State Bank of Pakistan is being eroded.

Bajwa retired from the post of secretary finance on June 18. The government has appointed the new SBP governor a day after dollar’s value sharply appreciated by Rs3.12 in a single day. The federal government had held acting governor Riaz Riazuddin responsible for the sudden spike in the dollar value.

The post of SBP governor fell vacant on April 28 after former central bank chief Ashraf Wathra's tenure ended. The government had given acting charge to Riaz Riazuddin.

Sources in finance ministry told The Nation that the government had considered two names for the post including Tariq Bajwa and former secretary finance Dr Waqar Masood. However, the government decided to appoint Bajwa as the new head of the central bank. Immediately after assuming his office, Bajwa convened a meeting of senior officials of the SBP and stated it was an honour for him to lead one of the prestigious institutions of the country.

He said he believed in teamwork and will continue to engage the senior management in decision making. The senior officials assured him of their cooperation and assistance in meeting goals and objectives of the bank.

Bajwa remained associated with Civil Service of Pakistan since 1981 before joining the SBP. He has varied experience in his career including field assignments of assistant commissioner and deputy commissioner, secretariat positions both the federal and provincial secretariat, General Manager PIA (1992-1996), Head of Pakistan’s Trade Mission in Los Angeles (1999-2004), Director General Planning and Finance in Earthquake Reconstruction & Rehabilitation Authority (ERRA) and the United Nations Development Programme (UNDP).

Bajwa served as secretary finance Punjab from 2010 to 2013 and during his tenure, he steered stabilizing the finances of the province and introduced several reforms including pension reforms. He also contributed as a director on the Board of Directors of Bank of Punjab (2010-2013) during which period the bank underwent major performance turnaround.

In 2013, he was appointed chairman FBR (July 2013 to October 2015) and under his leadership, FBR revenues witnessed significant growth and the concept of filer/non-filer was introduced. The exercise of withdrawal of Statutory Regulatory Orders was undertaken and slabs of Customs duties were reduced to four.

Thereafter, he took charge as secretary, Economic Affairs Division and then as secretary finance from where he worked until June 18, 2017. As secretary finance, he also served as a director on the SBP board during Feb-Jun 2017.

He holds a master’s degree in Public Administration from Kennedy School of Government, Harvard University and an LLB from University of the Punjab, Lahore.

He attended National Management Course at National School of Public Policy Lahore in 2009 and training at National Institute of Public Administration (NIPA) in 2004. His professional expertise and experience include public policy formulation and implementation with specialization in public finance and taxation.

Agencies add: Traders said SBP, run by an interim governor since May, this week effectively devalued the rupee by not propping it up as it normally does. Though the currency is meant to be freely traded, in practice SBP controls the thinly traded rupee market that works as a managed float.

Analysts say the appointment of a civil servant governor, rather than an economist, is likely to add to doubts about the state bank's autonomy.

Saad Hashmey, research director at brokerage Topline Securities, said with Bajwa's appointment "independence of the State Bank does come into question" but it also offers extra policy security for Pakistan.

"(The SBP and finance ministry) have to be on the same page," Hashmey said. "Certainty is good".

The rupee, trading at 105.50/75 against the dollar on Friday, has regained some of the losses since Wednesday, when it traded as high as 108.50.

The reservations also came from the political side. PPP Senator Saleem Mandviwalla said in a statement on Friday that the SBP is now a part of the Ministry of Finance and has no autonomy left to be independent. Regulatory institutions should not be made a part of the ministries as it lost the purpose of their existence.

He further said PPP always believed in SBP's autonomy and independence and maintained a distance between the Ministry of Finance and SBP. It is very unfortunate that the federal government has appointed a former secretary finance as Governor SBP.

He said it was because of the SBP's autonomy that the Senate Finance Committee made a policy board of SBP excluding the secretary finance so the policy decisions could not be influenced to suit the government’s agenda. The current federal government has exactly done that and appointed secretary finance at the highest position available at the State Bank who has just retired on June 30, 2017. Mandviwalla said that by doing this the federal government has literally made the SBP a subordinate of the Ministry of Finance.

He added that the IMF and World Bank had always supported parliament initiatives to make SBP an independent regulator and not to be under any ministry.

Mandviwalla urged that the federal government to be careful in creating a condition of anarchy where there is no room for independence and autonomy. The autonomous functioning of SBP is currently threatened which can result in dangerous outcomes for the economy. The federal government should have appointed a qualified person with relevant banking and regulatory experience as the Governor of State Bank of Pakistan.