The Joint sitting of the Parliament on Wednesday passed the crucial SBP Banking Services Corporation (Amendment) Bill, 2021 paving way paving way for International Monetary Fund (IMF) loan.

The bill aims to reduce the Finance Ministry’s oversight of the State Bank of Pakistan (SBP) by removing its nominee on the central bank’s board, a key demand of IMF.

According to the statement of objects and reasons of the bill, a new sub-section has been introduced in section 9, in line with good governance for the appointment of an Acting Managing Director within a period of fifteen days, from the date of vacancy, provided that, the Managing Director shall be appointed within a period of three months from the date of the occurrence of vacancy.

The power of the Board of Directors to appoint external auditors has been proposed in line with good governance.

An enabling clause on stations of subsidiaries by the Bank with the approval of Board and State Bank under this legislative proposal has been introduced for operational efficiency.

Amendments have been proposed to exempt the gratuity and provident fund employees of the Bank from attachment as already provided for, in case of pensioners, to make the bill consistent with the existing compensation benefits.

In order to provide adequate protection to the Bank and the officers of the Bank for actions taken in good faith, amendments have been proposed in section 28 of the Ordinance.

A new section 24-A has been proposed to legally protect the proceedings of the Board and the committees of the Board from any questions arising merely on the grounds of any vacancy or any defect in the constitution of the Board. This Bill is designed to achieve the aforesaid purposes.

The IMF loan seemed a certainty until April but has dragged on for seven months due to deadlock in negotiations between Pakistan and the IMF on the conditions of the loan. The delay in the bailout saw the rupee hit a historic low of 175.73 against the US dollar last week.

The joint sitting also passed The Companies (Amendment) Bill, 2021 and The Corporate Restructuring Companies (Amendment) Bill, 2021. The latter will help in making the Corporate Restructuring Companies (CRC) operate efficiently, acquiring Non-Performing Assets (NPAs) from the financial institutions and raising funds for acquisition of NPAs.

Source: Pro Pakistani