Tarin says SBP won’t be fully autonomous

ISLAMABAD – Finance Minister Shaukat Tarin on Monday said that State Bank of Pakistan (SBP) would not be completely autonomous as the federal government would still hold some control on it after the passage of the SBP (amendment) bill, 2021. He informed a parliamentary committee that the federal government would still retain control over the central bank after the passage of the SBP (amendment), bill 2021. 

The finance minister said that our team had accepted some very tough conditions of the IMF in March 2021 but now we have revised the SBP amendment bill. He clarified that the federal government would appoint and approve the board of governors of the SBP, who would be answerable to the parliament. Under the SBP (amendment) bill, 2021, the federal government could not borrow from the central bank. However, the incumbent government already had not borrowed from the SBP in the last two and a half years as it fuels the inflation rate. The federal government’s borrowing from central bank had already declined to Rs4.6 trillion from Rs7 to Rs8 trillion. 

Finance minister claims after bill passage govt still hold some control over central bank

He said the government had deleted five major clauses from the SBP autonomy bill. If they do not obey our instructions then we will cut its power with a simple majority of parliament.

He further said that the Prime Minister is also very clear that if they do not listen to us then we will change the law.

He further informed that the government would review the service tenure of the State Bank Governor. He also said that Pakistan has requested the International Monetary Fund (IMF) to postpone its executive board meeting scheduled on January 12, as the parliament is not a rubber stamp and it would discuss the two important bills Finance (Supplementary) Bill 2021 and State Bank of Pakistan (Amendment) Bill 2021.

He further said that IMF’s board could meet by the end of current month, i.e. January 28 or 31.

“Finance Division has officially requested the IMF to reschedule the meeting of the Board of Director for the approval of 6th review till end January,” said Muzzammil Aslam, Spokesperson to the Federal Minister for Finance and Revenue.

Finance Minister made these remarks in and outside National Assembly Standing Committee on Finance and Revenue, which met under the chair of Faiz Ullah to discuss the SBP (amendment) bill, 2021. He informed the committee that Pakistan in March 2021 had agreed with the IMF for strict actions for getting $500 million tranche. However, the existing SBP (amendment) bill, 2021 is quite different from which was agreed in March last year. 

Acknowledging the opposition’s role in democracy, Tarin commented who else would find faults with the government policies except the opposition. He expressed the hope that the government would be able to get the money bill passed by the parliament as early as possible.   

SBP Governor Dr Reza Baqir has also adopted same stance of the Finance Minister by saying that the government will retain full control of the central bank after the passage of SBP (amendment), bill 2021. “Draft of the bill is not secret anymore which says that the government will retain control” of the SBP. He has also clarified that SBP would not be under the IMF control. 

Responding to reports of his ties with the IMF, he added that he used to work for the fund, but it was not a crime to work in a global financial institution.

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