SBP governor’s term ends, but he may get a 3-year extension
Decision expected to be unveiled today as summary sent to PM
State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra. PHOTO: FILE
ISLAMABAD:
The government is considering offering another three-year term to State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra, who, if wins the nod, will face challenges of managing the deteriorating external sector and making the monetary policy an effective tool.
The Ministry of Finance has sent a summary for approval of Prime Minister Nawaz Sharif, seeking extension for Wathra, who completed his first term in office on Friday, said a senior official of the ministry.
Acting Auditor General of Pakistan Haq Nawaz also retired on Friday after reaching the age of superannuation. The government may appoint Imran Iqbal as new acting auditor general at least till June 18.
Wathra lauds role of banks in economic growth
Subject to approval of the prime minister, the announcement for the second three-year term for the SBP governor could be made today (Saturday), officials said.
The SBP law allows the government to appoint the governor for another term if his age is below the maximum limit of 65 years.
The decision would be an indication that Finance Minister Ishaq Dar would not change the economic team in the last year of the PML-N government.
In case the seat of the governor falls vacant, the government will have to appoint the new head within three months, according to the SBP Act of 1956.
If the premier rejects the extension summary, the finance ministry would send another summary, carrying names of probable candidates, said the officials.
Wathra's second term would begin at a time when Pakistan's economy is facing the challenge of growing current account deficit, dwindling foreign currency reserves that could impact the rupee exchange rate and an uptick in inflation.
The second term could also allow Wathra to implement the SBP's Strategic Vision 2020.
Apart from his experience with the central bank, Wathra has spent most of his 38-year career handling retail, commercial and investment banking.
Prior to joining the SBP in March 2013, he had been serving in National Bank of Pakistan (NBP) as senior executive vice president and group chief credit management group.
Before joining NBP, he worked in Habib Bank Limited from April 1999 to September 2012. He has a Master's in Business Administration.
Wathra did not take any major policy initiative in his first three-year stint and largely implemented the policies that were either designed by the federal government or the brainchild of the International Monetary Fund.
He was an instrument in legislation related to the banking sector, helped the federal government to achieve its targets of agriculture credit disbursement and took forward the policies of international financial institutions to expand financial inclusion in Pakistan.
At present, less than 20% of Pakistanis have access to formal banking channels, which the international financial institutions say should be increased to 50%.
Wathra also worked on setting up the Export-Import Bank of Pakistan and laid its infrastructure.
SBP governor urges banks to explore opportunities
However, he also had to face the National Accountability Bureau inquiry along with other central bank officers on the allegation of favouring BankIslami in the amalgamation of KASB Bank.
During the second term, Wathra can implement his unfinished agenda. Under the Strategic Vision 2020, the central bank will make efforts to develop a flexible inflation targeting framework that balances the need for price stability, including the exchange rate, with the need to support economic growth.
The other challenge on the monetary side will be to make the monetary policy an effective tool as its impact remains limited due to low level of participation from the formal banking sector.
To improve effectiveness of the monetary policy, the SBP will have to redesign its open market mechanism, increase the duration of borrowing and improve the use of foreign exchange reserves, according to the Vision 2020.
Published in The Express Tribune, April 29th, 2017.
The government is considering offering another three-year term to State Bank of Pakistan (SBP) Governor Ashraf Mahmood Wathra, who, if wins the nod, will face challenges of managing the deteriorating external sector and making the monetary policy an effective tool.
The Ministry of Finance has sent a summary for approval of Prime Minister Nawaz Sharif, seeking extension for Wathra, who completed his first term in office on Friday, said a senior official of the ministry.
Acting Auditor General of Pakistan Haq Nawaz also retired on Friday after reaching the age of superannuation. The government may appoint Imran Iqbal as new acting auditor general at least till June 18.
Wathra lauds role of banks in economic growth
Subject to approval of the prime minister, the announcement for the second three-year term for the SBP governor could be made today (Saturday), officials said.
The SBP law allows the government to appoint the governor for another term if his age is below the maximum limit of 65 years.
The decision would be an indication that Finance Minister Ishaq Dar would not change the economic team in the last year of the PML-N government.
In case the seat of the governor falls vacant, the government will have to appoint the new head within three months, according to the SBP Act of 1956.
If the premier rejects the extension summary, the finance ministry would send another summary, carrying names of probable candidates, said the officials.
Wathra's second term would begin at a time when Pakistan's economy is facing the challenge of growing current account deficit, dwindling foreign currency reserves that could impact the rupee exchange rate and an uptick in inflation.
The second term could also allow Wathra to implement the SBP's Strategic Vision 2020.
Apart from his experience with the central bank, Wathra has spent most of his 38-year career handling retail, commercial and investment banking.
Prior to joining the SBP in March 2013, he had been serving in National Bank of Pakistan (NBP) as senior executive vice president and group chief credit management group.
Before joining NBP, he worked in Habib Bank Limited from April 1999 to September 2012. He has a Master's in Business Administration.
Wathra did not take any major policy initiative in his first three-year stint and largely implemented the policies that were either designed by the federal government or the brainchild of the International Monetary Fund.
He was an instrument in legislation related to the banking sector, helped the federal government to achieve its targets of agriculture credit disbursement and took forward the policies of international financial institutions to expand financial inclusion in Pakistan.
At present, less than 20% of Pakistanis have access to formal banking channels, which the international financial institutions say should be increased to 50%.
Wathra also worked on setting up the Export-Import Bank of Pakistan and laid its infrastructure.
SBP governor urges banks to explore opportunities
However, he also had to face the National Accountability Bureau inquiry along with other central bank officers on the allegation of favouring BankIslami in the amalgamation of KASB Bank.
During the second term, Wathra can implement his unfinished agenda. Under the Strategic Vision 2020, the central bank will make efforts to develop a flexible inflation targeting framework that balances the need for price stability, including the exchange rate, with the need to support economic growth.
The other challenge on the monetary side will be to make the monetary policy an effective tool as its impact remains limited due to low level of participation from the formal banking sector.
To improve effectiveness of the monetary policy, the SBP will have to redesign its open market mechanism, increase the duration of borrowing and improve the use of foreign exchange reserves, according to the Vision 2020.
Published in The Express Tribune, April 29th, 2017.