NA passes State Bank of Pakistan (Amendment) Bill

ISLAMABAD: The National Assembly Monday passed the State Bank of Pakistan (Amendment) Bill, 2015 when the quorum was not complete due to the absence of opposition members.
The bill, which has already been passed by the Senate, would become an Act of Parliament after signing by the president.
Parliamentary Secretary for Finance and Economic Affairs Rana Muhammad Afzal moved the bill following the re-election of Speaker Sardar Ayaz when less than 35 members were present in the house.
The role of SBP has been strengthened further by substituting the federal government’s approval wherever required with the board’s approval
The Statement of Objects and Reasons of the bill says, “The existing clauses pertaining to shareholders, executive committee and local boards have been omitted in the SBP Act by introducing various amendments to the Act since these are no longer relevant after the promulgation of the Bank (Nationalization) Act, 1974.”
Another new section on regulatory power has been introduced in the Act in order to provide explicit powers to the SBP for issuing directives and imposing and recovering penalties which are already being exercised by SBP under the Banking Companies Ordinance 1962.
A statutory Monetary Policy Committee with external experts to be appointed by the federal government has been established, which will be responsible to formulate, support and recommend the Monetary Policy and take appropriate decisions relating to key interest rates, supply of reserves, exchange rate policy and limit and nature of advances and loans to the government.
The main object for introducing this statutory committee is to enable the State Bank to perform its essential functions in a professional way in a changing and emerging financial environment.
Consequently, various sections in the Act have also been amended to secure the
independent statutory role of the Monetary Policy Committee.The statement of reasons behind the legislation states that to further the role of Islamic Banking in Pakistan it was essential for the bank to engage in Shariah Complaint Instruments as an amendment has been introduced whereby the bank is allowed to hold property for the purposes of use of Sharia Complaint Instruments.
The role of SBP has been strengthened further by substituting the Federal Government’s approval wherever required with the board’s approval.