New SBP amendment not linked to IMF terms: Farogh

Published November 18, 2021
This file photo shows Law Minister Dr Farogh Naseem. — DawnNewsTV/File
This file photo shows Law Minister Dr Farogh Naseem. — DawnNewsTV/File

ISLAMABAD: The joint session of parliament on We­d­nesday approved an am­e­ndment to the State Bank of Pakistan (SBP) Ban­king Services Corporation Ordinance 2001 to enable the central bank to meet emerging operational needs of the banking sector.

However, the amendment is different from the bill to grant autonomy to the State Bank, which is under negotiations with the Interna­tional Monetary Fund.

For the past few days the opposition has been criticising the government for planning to bring a bill to grant autonomy to the SBP in line with IMF dictations.

Even in his speech during the joint session of parliament, PPP chairperson Bila­wal Bhutto-Zardari annou­nced resisting the government’s move to put the SBP under the IMF control.

When contacted, Law Minister Dr Farogh Naseem said the present law has nothing to do with the IMF, since it’s an altogether different legislation.

The amendment was originally submitted to the Nat­i­onal Assembly in January 2020 and signed by Dr Abdul Hafeez Shaikh, former adviser to the prime minister on finance and revenue.

The objects and reasons of the amendment are to optimise the operational efficiency of the banking sector regulator.

The amendment has inc­orporated a sub-section in section 9 of the ordinance in line with good governance for appointment of an acting managing director within 60 days from the date of occ­urrence of vacancy, provided that the managing director will be appointed within three months from the date of the occurrence of vacancy.

The amendment allows the SBP board of directors to appoint external auditors in line with good governance.

An enabling clause on creation of subsidiaries by the SBP Banking Services Cor­poration with the app­roval of the board has been introduced for operational efficiency.

The amendment proposes exemption of gratuity and provident fund of SBP employees from attachment, as already provided for, in case of pensioners to make the ordinance consistent with the existing compensation benefits.

Changes have been made in several clauses of section 28 of the ordinance to provide adequate protection to the central bank and its officers for actions taken in good faith.

A new section 24A has been proposed to legally protect the proceedings and committees of the board from any questions arising only on the grounds of any vacancy or any defect in the constitution of the board.

Published in Dawn, November 18th, 2021

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