Senate passes crucial SBP bill amid Opposition's protest ahead of IMF review

The upper house of the Parliament on Friday passed the controversial State Bank (Amendment) Bill 2021, amidst protests from the Opposition benches.

On January 13, the National Assembly passed the SBP autonomy bill along with the supplementary finance bill — both these bills were a requirement by the International Monetary Fund (IMF) programme.

The approval of the State Bank amendment bill was necessary to ensure Pakistan’s sixth review of the $6 billion Extended Fund Facility (EFE) gets cleared by the IMF’s Executive Board which is scheduled to meet on February 2 to decide the disbursement of the $1-billion tranche.

When Federal Minister for Finance and Revenue Shaukat Tarin tabled a motion seeking permission to introduce the SBP bill, the opposition members objected to it. A motion was put forth to vote through division and was carried by 44 against 43 votes, marking the first blow to the opposition in the day.

The bill was passed by a majority vote as the opposition kept on expressing its reservations.

The Senate session has been adjourned till Monday 3pm.

Who was absent today?

During the session, 12 members were absent, including eight members of the Opposition, two of the government and two from independent candidate Dilawar Khan’s group.

PPP’s Yousuf Raza Gillani, Qasim Ranjho and Sikandar Mendro did not attend the session.

Among Opposition members, Pashtoonkhwa Milli Awami Party’s Shafiq Tareen and Naseema Ehsan did not attend the meeting.

Meanwhile, JUI’s Talha Mahmood and Hidayatullah and Hilal-ur-Rehman, two of the six members of the Dilawar Khan group, were absent from the meeting.

Among the government allies, Senator Faisal Sabzwari and Khalida Ateeb of MQM were absent from the meeting.

Sherry Rehman lashes out at govt

Earlier, PPP Senator Sherry Rehman via Twitter lashed out at the PTI-led government for stripping the country of its autonomy to make decisions by trying to bulldoze the State Bank of Pakistan (Amendment) Bill 2021.

In a series of tweets, Rehman took exception to the issuance of the agenda for today's meeting of the Senate.

The Senator said that issuing the agenda at such a juncture was "unprecedented for government's standards of parliamentary manipulation", which also was proof of the government's "intimidation".

"This is how the government is trying to bulldoze the SBP’s 'autonomy' bill, whereby it strips the country of its own ability to make sovereign decisions in times of national crises," she wrote.

Rehman further stated that the government wants to imply to the IMF that the SBP bill was passed with parliamentary approval but actually, the entire Opposition is against it.

"While borrowing from the State Bank is not always prudent, often inflationary, the IMF’s condition that Pakistan’s central bank can’t raise money at all will impact our sovereign ability to mobilise funds in national emergencies, even war," Rehman said, adding that this is unacceptable.

The Senator further stated that central banks are autonomous only to the extent they make monetary policy but it seems that PTI has borrowed so much in the last three and a half years of its rule that commercial banks will soon become the only lenders.

"What will happen to the SBP, lender of last resort when crisis looms? What will happen to the government’s ability to put down sovereign guarantees in big projects?" she asked.

Rehman said that the debt has been listed as contingent liabilities so that the IMF can overrule even them.

"Such terms are unheard of and rejected by the joint opposition," she asserted.

"Did we hear the finance minister say the central bank should advise the commercial banks that the government may default on its domestic debt? What is going on here? The borrowing has gone through the roof, but this is quite unprecedented," Rehman concluded.