Sections of SBP amendment bill violate constitution, says Farogh Naseem

Published November 2, 2021
Law Minister Barrister Dr Farogh Naseem addresses a press conference in this file photo. — DawnNewsTV
Law Minister Barrister Dr Farogh Naseem addresses a press conference in this file photo. — DawnNewsTV

ISLAMABAD: Law Minister Barrister Dr Farogh Naseem has said that the proposed Section 46B(8) in the State Bank (Amendment) Bill 2021 is violative of the Constitution.

While briefing the International Monetary Fund officials via video link on Monday, he said the provision provides that the central bank would be consulted on any proposed legislation relatable to the SBP.

The legislative power has been conferred by the Constitution on the parliament, and the Constitution does not provide for any consultation with the SBP prior to passing of any legislation, he explained, adding the proposed section introduced a stipulation which was ultra vires of the Constitution.

This provision is also liable to be struck down by courts, he said, adding that in any event the parliament itself would not pass any such amendment as it was unconstitutional.

Likewise under the proposed Section 15(1), the governor, deputy governors, or any non-executive directors or external members of the Monetary Policy Committee cannot be removed on the grounds of misconduct unless a court of law first determines that serious misconduct has been committed, he said.

This provision is unconstitutional as it violates the equality clause contained in Article 25 (equality of Citizens) of the constitution, which, inter alia, provides for equal treatment. Even the judges of superior courts can be proceeded [against] under Article 209 for misconduct, without there being a prior requirement of a declaration from a court of law that the judge has committed misconduct.

Section 51A proposes blanket protection to governor, deputy governors, directors including former incumbents of the SBP against proceedings under the NAB Ordinance, 1999 and FIA Act, 1974.

Again, he said, the proposal violates the equality clause contained in Article 25, since incumbents under other statutes have not been given similar protection.

Besides, the proposed Section 46B(5) provides that the SBP shall “interact and communicate” with the parliament, when the words “interact and communicate” essentially connote the right to speak.

Article 57 of the Constitution provides that the prime minister, a federal minister, a minister of state and the attorney general shall have the right to speak and otherwise take part in the proceedings in the parliament. This categorically means that SBP or its functionaries cannot interact and communicate with the parliament, the minister said.

The SBP falling under the ministry of finance, will have to interact and communicate with the parliament through the finance minister. Therefore, the proposed insertion i.e. Section 46B(5) would be hit by Article 57 of the Constitution, he said.

The minister explained that the government did not have a two-thirds majority in parliament so as to amend the Constitution.

Thus the proposed SBP Amendment Bill will have to go through many stages in the parliament, before it could be finally legislated/passed and would take between four and seven months. Hence, it is not possible to pass the Bill before Dec 17.

Thus, the passage of the bill by or before Dec 17 should not be treated as a “prior condition” by the IMF, he said.

Published in Dawn, November 2nd, 2021

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