SBP will remain under govt control, Tarin tries to calm opposition's nerves

Says govt will appoint its board members: It will borrow money from commercial banks instead of central bank

By: 24 News
Published: 04:32 PM, 10 Jan, 2022
Shaukat Tarin (File photo).
Caption: Shaukat Tarin (File photo).
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Finance Minister Shaukat Tarin on Monday tried to alley opposition members’ concerns regarding the State Bank of Pakistan (Amendment) Bill assuring them that the central bank will not be fully autonomous rather the government will retain control over it, reported 24NewsHD TV channel. 

The finance minister was briefing the Senate Standing Committee on Finance regarding the SBP (Amend) Bill. The meeting was chaired by Senator Talha Mehmood. 

Tarin informed the Senate committee members that government would retain control over the SBP as the government will nominate its board of directors. The government will also be responsible for the appointment of board members, he further explained. 

He said the IMF asked the government to not borrow money from the central bank and “government didn’t borrow from the SBP for the last 2 ½ years. However, previous volume of the SBP loan was amounted to Rs7,000 billion.”  

The finance minister informed the committee that the government would now take loans from the commercial banks rather than the State Bank, and that too at the same rate. 

Tarin said the government itself would appoint officials of the monetary policy. He said the government had deleted five major clauses from the SBP autonomy bill.

He further informed that the government would review the service tenure of the State Bank Governor. 

The minister told the committee that the International Monetary Fund had acceded to Pakistan’s request for the postponement of its executive board meeting, which would now be held either on January 28 or January 31.

He said the government had conveyed this to the IMF in categorical terms that the country’s parliament was not a ‘rubber stamp’, and whatever changes the parliament suggested to the money bill would be incorporated in it. 

He said there would be no further talks with the Fund on the sixth review mission. 

Acknowledging the opposition’s role in democracy, Tarin commented who else would find faults with the government policies except the opposition

He expressed the hope that the government would be able to get the money bill passed by the parliament as early as possible.   

The minister also tried to address the concerns of senators belonging to the opposition parties over the money bill (mini budget). He said despite the fact that the government had levied sales tax on laptops, it, at the same, had also announced subsidy on them. 

He was responding to remarks made by Senator Faisal Sabzwari from the Muttahida Qaumi Movement-Pakistan (MQM-P) during the meeting.

The MQM-P had demanded the government to withdraw tax on laptops incorporated in the mini budget presented by the government in the National Assembly recently.    

It is startling that despite being an ally of Pakistan Tehreek-i-Insaf (PTI) government at Center, the MQM-P chose to voice its serious reservations over the ‘mini budget’. “We will ensure that none of our members of the parliament vote for the taxes made part of the mini budget,” he vowed.  

Speaking on the occasion, Senator Sherry Rehman of Pakistan Peoples Party (PPP) said members of the committee had already expressed their concern over the money bill. 

She regretted that the gas crisis had forced people to leave for their offices without breakfast. “Despite the fact that milk and bread constitute an important part of the common man’s diet, still the government has levied taxes on them,” she deplored. 

PPP senator underscored the point that imposition of taxes on such items of daily use items would lead to a further increase in their prices. 

Sherry said opposition parties were bitterly opposed to the State Bank of Pakistan’s (SBP) autonomy bill. “Is the government aware of the consequences of placing the bank under the International Monetary Fund’s (IMF) control that might ruin the value of Pakistan currency?” she questioned.  

“By doing so, whatever say the SBP has right now in determining the rupee’s value will be snatched from it,” she expressed her fear. 

The PPP senator also sought from the government details of the IMF’s postponement of Pakistan’s loan programme.

Governor Reza Baqir rubbishes rumours of selling SBP to IMF 

Separately, while giving briefing to National Assembly Standing Committee on Finance, State Bank Governor Reza Baqir regretted that contrary to the facts, the opposition and some sections of media tried to create an impression that the government had sold out the central bank to the IMF.

He said now when members of the parliament had seen draft of the bill, it had dawned upon them that there was no truth in the allegation that the bank had been placed under the IMF control. 

“I used to work at the IMF in the past. Is working for an international organisation a crime? There are several persons in Pakistan’s history who first served at the IMF before going on to hold important positions in the government,” he reminded. 

 Reporter Waqas Azeem