The International Monetary Fund has urged Pakistan to remove the finance secretary from the State Bank of Pakistan’s (SBP) board and swiftly appoint two missing deputy governors, moves the lender says are vital to strengthen the central bank’s independence.
In a governance report, the IMF also recommended amending the Banking Companies Ordinance of 1962 to strip the federal government of its authority to order SBP inspections of commercial banks, further reducing state influence over financial regulation.
The proposals come as the global lender pushes Islamabad to deepen reforms after Pakistan amended the SBP Act in 2022 to grant sweeping autonomy to the bank and end the finance secretary’s voting rights on its board.
The SBP board currently includes the governor and eight non-executive directors, one from each province, but only one of the three sanctioned deputy governor posts is filled. Saleem Ullah, overseeing finance, inclusion and innovation, remains the lone deputy governor.
Finance Minister Muhammad Aurangzeb, meanwhile, said the government has no say in setting interest or exchange rates, which are determined solely by the SBP. He confirmed an IMF review mission will visit in September to discuss the release of a $1 billion loan tranche.
