The Prime Minister Office (PMO) had taken great exception to a bill granting autonomy to the State Bank of Pakistan (SBP) to meet certain conditions of the International Monetary Fund (IMF), expressing reservations over the complete ban on government borrowing from the SBP.
The PMO noted that granting absolute autonomy to the state bank meant that the SBP governor would be no longer mandated to meet the premier to liaise on economic matters.
It also expressed misgivings about increasing the governor’s term from three years to five years, despite the former’s desire to keep it unchanged.
The PM’s Office had also raised several other objections over the SBP amendment Bill, 2021, which envisages complete autonomy for the central bank and places a complete restriction on the government’s borrowing from the SBP.
However, except for a few objections, the majority of the concerns were not fully addressed due to limitations imposed under the IMF negotiations.
The premier’s office had disagreed with giving complete autonomy to the SBP and sought the deletion of section 46 B (4) from the Bill.
The section states: “The bank, the members of the decision-making bodies and its staff shall neither request, nor take any instructions from any person or entity, including the government or quasi-government entities. The autonomy of the bank shall be respected at all times and no person or entity shall seek to influence the members of the board, executive committee, monetary policy committee, or the staff of the bank in the performance of their functions”.
The PMO wanted to get section 46 B (4) dropped as the PM will not be able to call the governor even to discuss economic matters, in the event the governor invoked privilege under this section. However, the section still remains part of the bill, tabled in the National Assembly.