The International Monetary Fund (IMF) has asked Pakistan to remove the finance secretary from the State Bank of Pakistan (SBP) board and immediately fill two vacant deputy governor positions to strengthen institutional independence.
The lender has also recommended amending the Banking Companies Ordinance of 1962 to remove the federal government’s authority to instruct SBP to inspect commercial banks, further reducing state influence over financial regulation.
In its Governance and Corruption Diagnosis Mission report, the IMF stressed that these reforms would ensure stronger autonomy at the central bank, even though the government remains the sole shareholder of SBP.
Previously, in 2022, Pakistan amended the SBP Act under IMF pressure to provide absolute autonomy to the bank and revoked the finance secretary’s voting rights on the SBP board of directors.
Currently, the SBP board includes the governor and eight non-executive directors, one from each province. However, two of the three sanctioned deputy governor posts remain vacant, with only Saleem Ullah serving in finance, inclusion, and innovation.
Meanwhile, Finance Minister Muhammad Aurangzeb confirmed that the government has no role in setting interest rates or exchange rates, both determined by the SBP. He added that the IMF review mission will visit Pakistan in September for talks on a $1 billion loan tranche.