WHAT transpired in the crucial meeting of the National Assembly Standing Committee on Finance and Revenue, which cleared the State Bank of Pakistan (Amendment) Bill, proved that the apprehensions being expressed by some circles, especially the Opposition about status and role of the central bank, were ill-founded.
The Committee incorporated three important amendments proposed by the Opposition members and above all Minister for Finance Shaukat Tarin rightly pointed out that this is a normal piece of legislation, which can be amended further in future if at any point in time it was felt that the SBP was enjoying absolute power and authority.
The clarifications made both by the Finance Minister and Governor of the Bank Dr Reza Baqir made all the difference as they addressed misperceptions and rumour-mongering in a cogent manner.
Shaukat Tarin explained that the bill did not envisage absolute autonomy to the central bank, but only sought to enhance its independence as per international best practices, adding the Government would appoint the Board of Directors which would control the central bank and its senior management.
Similarly, Dr Baqir emphatically stated before the Committee that he did not have nationality or permanent residency status abroad, and had resigned from the IMF on assuming charge as SBP Governor, even though there was no bar to do so at the time.
The Committee has recommended three major changes to the bill – a bar on appointment of dual nationals as SBP Governor, a two-year restriction on the employment of a Governor in an institution that he/she may have engaged in negotiations with and making the Governor and bank’s senior management answerable to Parliament.
These amendments were supported by the State Bank Governor, which demonstrated his sincerity and professionalism and a commitment to the cause of Pakistan.
In fact, Dr Reza Baqir is a thorough professional with vast international exposure and the SBP introduced significant reforms in the banking and financial sector during his tenure.
All the policies undertaken by him were motivated by his desire to help strengthen the economic and financial sectors and it is because of such prudent policies that today the country was in a position to withstand external shocks.
In this backdrop, the tendency to doubt credentials or loyalty of important personalities should come to an end and experience like working in the IMF need to be considered an asset and not a liability as is the case elsewhere in the world.