The International Monetary Fund asked Pakistan to remove the finance secretary from the board of central bank to enhance central bank’s independence and improve governance.
Due to the earlier pressure by IMF, the government has removed voting rights of the secretary but has still not agreed for the removal of finance secretary entirely. Discussions on this matter is still ongoing. IMF believes that removal of the finance secretary would strengthen the central banks autonomy.
IMF has also recommended to change Banking Companies Ordinance 1962 and government’s ability to direct the SBP to inspect commercial banks. Islamabad was also asked by IMF to fill two open deputy governor positions at SBP to support collective decision making.
These recommendations are a part of Pakistan’s implementation of a $7 billion IMF loan. Each loan package installment requires fulfilling agreed upon condition.
