Zubair Qureshi Islamabad
Governor State Bank of Pakistan (SBP) Reza Baqir has dismissed the fears and the rumours that the proposed State Bank Bill that is in a draft form so far, grants limitless powers to the central bank or once it becomes Act, it would cripple the federal government’s monetary oversight/authority over the bank or its policies.
Addressing an online meeting on Monday with digital broadcasters over the ‘SBP Autonomy’ a debate that has gripped the country recently, Governor Reza Baqir said the SBP Act is not going to be amended for the first time. Earlier, it has been amended in 1994, 1997, 2011 and 2015.
He also rubbished the stance of some financial experts, anchors and other critics who keep on claiming in the press or on the national media that according to the new amendment, the bank and its functionaries would no longer be held accountable for their ‘misdeeds’.
I would request them to first go through the draft or wait until it is made public as there is no such thing as ‘extraordinary’ powers to be enjoyed by the central bank.
The bill he said categorically explains the tasks of the SBP that include: Keep inflation down; Ensure financial stability in the country and promote the government’s policies of development & growth.
Until now, he said there were no stated tasks before the SBP and it was deemed necessary to put them in black and white and give the bank certain amount of leverage to meet these objectives and make policies in the best interests of the country.
While giving a short overview of the SBP monetary policies after he took over in 2019, Reza Baqir said the first thing the SBP did was to make exchange rate flexible.
That was a difficult but long-term decision and it yielded results and helped Pakistan come out
of ‘Bubble & Burst’ phase.
Secondly, he said the government also showed complete trust in the bank’s policies and as a result our foreign reserves saw a tremendous boost and all the institutions showed an upward trend by adopting financial discipline.
Putting all these objectives in an act is in effect to make the SBP accountable rather to make if free of any accountability, he emphasized.
The online meeting was also participated and addressed by the Deputy Governor Dr Murtaza Syed, senior officials
of the SBP Dr Inayat Hussain (Ex-Director) Abid Qamar and others.
Deputy Governor Murtaza Syed was of the view that recently, the SBP achieved a number of landmark achievements but unfortunately, those stories just like our success against COVID-19 went untold.
The SBP through this new act would be empowered to control inflation as is monitored by the central banks in our neighbouring India, Bangladesh, Malaysia or Indonesia, said Dr Murtaza said.
The only difference in the bill from the previous one is the
country’s anti-graft agencies would be required to get permission from the BoG of the SBP before moving against its executives or investigate any financial scam, as is a common practice worldwide, said he.
Dr Murtaza who has also resigned from the IMF and joined the central bank with a mission to reform and stabilize Pakistan’s financial health urged the media to clarify instead of confusing the common man over the SBP Act that is for the collective good of the country and in the best interests of the nation.