ISLAMABAD: The State Bank of Pakistan (SBP) has come under fire after proposing amendments to its law that would allow the appointment of dual nationals as Deputy Governors.
Sources close to the Secretary of Finance, told Newzshewz that the Central Bank’s proposed legislation was scrutinized during a recent federal cabinet meeting, presided over by the Prime Minister, Shehbaz Sharif.
The Ministry of Finance informed the Cabinet that the SBP, established under the State Bank of Pakistan Act, 1956, had proposed amendments to address evolving business needs. These changes would allow the SBP to take steps toward issuing digital currency, establishing subsidiaries, and increasing flexibility in the appointment of Directors, Monetary Policy Committee members, and Deputy Governors.
The Cabinet was informed that Section 11A(6) of the SBP Act currently prohibits the Governor from holding dual nationality, and extending this restriction to other officials was seen as overly restrictive, limiting the pool of potential candidates. The Ministry also confirmed that the Law and Justice Division had vetted the proposed amendments.
Furthermore, the Cabinet was briefed that, under Rule 27 of the Rules of Business, 1973, in-principle approval from the Cabinet was required before the amendments could be submitted to the Cabinet Committee for Disposal of Legislative Cases (CCLC).
During the discussion, some Cabinet members expressed strong reservations about allowing dual nationals to hold sensitive positions, such as Deputy Governors. They argued that dual nationals should not hold such roles in the SBP or any other government institution. Others, however, suggested that while dual nationals should generally be excluded from sensitive positions, the Cabinet should retain the authority to grant exceptions on a case-by-case basis to secure the best talent for the country.
As a result, the Ministry of Finance sought in-principle approval from the Cabinet to place the draft State Bank of Pakistan (Amendment) Bill, 2024 before the CCLC. After a thorough discussion, the Cabinet formed a committee under Rule 17(3) of the Rules of Business, 1973, with the following composition and terms of reference: ( i) Minister for Planning, Development and Special Initiative(Convener) ;(ii) Minister for Defence( Member) ;(iii) Minister for Law and Justice( Member) ;(iv) Minister for Finance and Revenue (Member) ;(v) Secretary Finance (Member) ;(vi) Chairman, FBR ; and ( vii) any co-opted Member/s( Member. The Terms of Reference (ToRs) of Committee will be as follows ;(i) to review the amendments relating to dual nationals proposed in the draft Soft Bank of Pakistan (Amendment) Bill, 2024 and examine the implications of allowing dual nationals to hold sensitive positions central bank; (ii) to give recommendations on whether the amendments should be allowed as proposed in the draft ‘State Bank of Pakistan (Amendment) Bill, 2024,, or rejected, or allowed with modifications to empower the Federal Cabinet to grant an exemption to meritorious candidates holding dual nationality under special circumstances; (iii) to examine whether the existing restrictions on appointment of dual nationals in the case of the State Bank of Pakistan, or any modified restrictions that the Committee may propose, should be specific only to a central bank, or whether they should also be introduced in the case of other government organisations.
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