In a significant move aimed at tightening oversight over financial regulators, the Senate Standing Committee on Finance has decided to strip the Securities and Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP) boards of their authority to independently determine executive salary packages. The decision follows revelations of extraordinary pay hikes at the SECP, which sparked widespread criticism from legislators and auditors.
The development came during a meeting of the Senate panel chaired by Senator Saleem Mandviwalla of the Pakistan People’s Party (PPP). The committee expressed serious concerns over the retrospective salary increases approved for SECP executives, including Chairman Akif Saeed and commissioners. The Ministry of Law and Justice Secretary, Raja Naeem Akbar, supported the committee’s decision and assured that amendments would be introduced in both the SECP Act and the SBP Act to formally withdraw such powers from their boards.
The issue gained traction after reports surfaced that the SECP chairman was drawing an annual salary of Rs41 million, with commissioners receiving nearly Rs35.8 million each due to backdated raises. The Public Accounts Committee (PAC), earlier this week, had also expressed shock over the scale of these increases, which were approved during a Policy Board meeting in October 2024, applied retrospectively from July 2023. An audit report by the Auditor General of Pakistan (AGP) further revealed that these raises, amounting to over Rs156 million annually, were granted without mandatory approval from the Ministry of Finance.
The audit also flagged the distribution of Rs110 million in entertainment allowances to SECP staff and commissioners, a move deemed illegal under existing regulations. The disclosures raised sharp questions about governance and the misuse of regulatory autonomy. “The authority to increase the salary has been misused,” remarked Senator Farooq H. Naek, adding that no regulator should have unchecked financial discretion.
During the committee session, SECP Chairman Akif Saeed defended the decision, arguing that the board was fully empowered and had based its decision on a market survey of compensation trends. However, Senator Anusha Rahman pointed out that among 18 regulators in Pakistan, only three — including SECP — had the authority to fix salaries through their boards, while the rest required federal cabinet approval. She insisted that autonomy could not be used as a shield for abusing public funds.
The controversy also brought comparisons with other regulators. Competition Commission of Pakistan (CCP) Chairman Dr. Kabir Sidhu noted that his salary was only one-seventh of the SECP chairman’s and highlighted that the CCP had no such powers without government clearance. Federal Board of Revenue (FBR) Chairman Rashid Langrial, who was also present, denied allegations of arbitrarily increasing salaries at his institution, stating that any adjustments must follow defined processes.
This is not the first time regulatory bodies have come under scrutiny for self-approved remunerations. Earlier this year, reports revealed that senior officials at the National Electric Power Regulatory Authority (Nepra) had also raised their salaries significantly without cabinet authorization, with the chairperson’s gross monthly package reaching nearly Rs3.25 million.
Lawmakers stressed that while regulatory autonomy is critical for efficiency, it must operate within a framework of accountability. Senator Naek pointed out that even the Supreme Court cannot set its own salaries, which are determined by the President on the Prime Minister’s advice, underscoring the principle of executive oversight.
By moving to amend the SECP and SBP laws, the Senate aims to close a loophole that allowed boards to unilaterally decide executive compensation. The decision signals a broader push toward transparency and fiscal discipline, especially at a time when Pakistan faces deep economic challenges.
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