Prime Minister Shehbaz Sharif has taken a significant step towards reviewing the proposed amendments to the State Bank of Pakistan (SBP) Act, which include allowing dual nationals to be appointed as governor and deputy governor of the central bank. The decision to form a committee for a detailed review follows the cabinet’s decision to defer the approval of the SBP Amendment Bill. This move comes at a crucial time when the issue of dual nationality is at the center of debate concerning key appointments at the central bank.
According to a recent report, the finance ministry had suggested several key amendments to the SBP Act, one of which proposed lifting the restriction on dual nationals holding high-ranking positions at the SBP. The proposal would enable dual nationals to be appointed as the governor and deputy governor of the central bank, a move that has generated both support and concerns within the cabinet. The law ministry has already vetted the changes, but the decision on their approval has been postponed until further examination by a specially formed committee.
The importance of this issue is highlighted by the recent completion of the term of SBP’s deputy governor, Dr. Inayat Husain, who holds dual nationality. The government is keen on retaining him for a new five-year term, which has sparked discussions around the dual nationality provision. Another prominent candidate for the deputy governor role, Dr. Saeed Ahmad, also holds dual nationality, further intensifying the debate on whether such individuals should be allowed to serve at the helm of the country’s central banking system.
Under the current SBP Act, the federal government appoints the deputy governors based on recommendations from the SBP governor in consultation with the finance minister. However, Section 13 of the Act disqualifies individuals with dual nationality from holding the positions of governor, deputy governor, or directors at the central bank. The proposed amendment seeks to remove this restriction, opening the door for dual nationals to serve in these critical positions, which has stirred a conversation about the potential risks and benefits.
Some cabinet members have raised concerns about the implications of allowing dual nationals to occupy such high-profile roles. They expressed apprehension that these individuals may return to their countries of origin after their term ends, potentially leaving Pakistan without key banking leadership. On the other hand, Finance Minister Muhammad Aurangzeb, who had renounced his Austrian nationality upon taking office, has been a vocal supporter of the proposal. He argued that the expertise and experience of dual nationals could be a valuable asset to the country’s financial sector.
In response to these debates, Prime Minister Sharif directed the Cabinet Division to form a committee that will thoroughly review the proposed amendments before they are presented again to the cabinet for approval. This committee will take into account all viewpoints, including those of cabinet members who have expressed reservations about the implications of such appointments. The prime minister also instructed that Minister of State for Finance, Ali Pervaiz Malik, be consulted on all matters related to the cabinet’s economic decisions. This directive follows Malik’s objection during a cabinet meeting, where he noted that he was not consulted on the proposal before it was submitted for consideration, a violation of the Rules of Business of 1973, which require the finance minister’s approval before cabinet submissions.
As the committee works on reviewing the proposed amendments, the fate of dual nationals serving as key figures in the SBP’s leadership remains uncertain. The outcome of this review will likely have far-reaching implications for the governance of Pakistan’s central bank, impacting its ability to navigate future economic challenges and implement necessary reforms.