ISLAMABAD:
The government has managed to get an important piece of
legislation passed from parliament that empowers the State Bank of
Pakistan (SBP) to take crucial decisions independently pertaining to
interest rates, foreign currency reserves, exchange rate, limit and
nature of advances and loans to the government.
It tabled “The State Bank of Pakistan (Amendment) Bill 2015” in the
National Assembly on Thursday in the absence of opposition legislators
as they staged a walkout in protest against the attitude of cabinet
members, who, according to them, were not taking the house business
seriously.
The new law paved the way for setting up a statutory monetary policy
committee that would take monetary policy decisions independently and
without any interference.
“A statutory monetary policy committee, with external experts to be
appointed by the federal government, has been established, which will be
responsible to formulate, support and recommend the monetary policy,”
said the bill.
When the leader of opposition, Syed Khursheed Shah of Pakistan
Peoples Party, after censuring government’s ministers for their
indifferent attitude, left the floor with other members of opposition
parties, Deputy Speaker Javed Abbasi presented the bill, though the
required number of lawmakers was not present.
The lack of interest in the legislative business on the part of
lawmakers was evident from their absence from the lower house of
parliament.
The statutory committee will enable the central bank to perform its
essential functions in a professional way in a changing financial
environment.
“An enabling clause allowing the SBP to establish a depositor’s
protection fund has been introduced. A draft law for the fund is already
under consideration of the government whereby the fund will be a
subsidiary of the SBP,” said the bill.
It also empowers the SBP to take enforcement actions including
imposition and collection of pecuniary penalties on legal and natural
persons for contravention of the law.
“A new section about the lender of last report has been introduced in
the Act for troubled banks. Another new section about regulatory powers
has been introduced in order to provide explicit powers to the SBP for
issuing directives, imposing and recovering a penalty, which is already
being exercised by the SBP under the Banking Companies Ordinance 1962,”
it added.
From now on, the SBP’s central board will submit a quarterly report
to parliament on the state of economy with special reference to economic
growth, money supply, credit, balance of payments and price
development.
Published in The Express Tribune, August 14th, 2015.
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