The Pakistan Tehreek-e-Insaf (PTI) has proposed a bill to make the State Bank of Pakistan (SBP) autonomous and practically provide immunity to the SBP bigwigs.
As per the bill, no investigation agencies will be able to act against the SBP governor and other high-ups without the permission of the SBP board of directors.
“No action, inquiry, investigation or proceedings shall be taken by NAB, FIA or provincial investigation agency, bureau, authority or institution by whatever name called without prior consent of the board of directors of State Bank,” according to a clause in the proposed State Bank of Pakistan (Amendment) Bill 2021 quoted by a newspaper read.
The proposed bill, if become a law, also provides immunity to the former SBP directors, governors, deputy governors. It also proposes changes to the existing SBP Act that says bank employees shall be deemed as public servants.
According to the proposed bill, the officials of the SBP will not be prosecuted over actions performed under the proposed act unless they are done with mala fide intent. In case of any proceedings against the high-ups of the SBP, the central bank shall bear all the expenses and they shall be indemnified by the bank.
Earlier, the finance ministry published an explainer that said that the proposed SBP Amendment Act, 2021, will make the central bank autonomous in light of international best practices and domestic experiences.
According to the salient features of the proposed bill, the legal framework of the SBP is being amended to improve its accountability and outline the SBP’s functions in line with its objectives. The new legal framework will provide will improve transparency in the operations of the SBP. Authorized capital of the central bank will be increased from one hundred million rupees to five hundred billion rupees.
“Paid-up capital and general reserves to increase to 8% of the monetary liabilities of the Bank through retention of 20% of distributable profits each year,” the MoF stated. “General Reserve only to be used for increasing capital or cover losses.” The Bank shall, not less than twice a year, publish and submit to the Parliament and the Minister of Finance, a state of the economy report.