Bajwa not being considered for SBP governor post, says govt

PPP claims a foreign national is being picked for the key slot

ISLAMABAD: The Ministry of Finance has said that at present it is not considering appointing Atif Bajwa as new governor of the State Bank of Pakistan (SBP) after fierce reaction from Pakistan Peoples Party (PPP) to reports that Bajwa is being considered as new head of the central bank.



“For the seat of State Bank of Pakistan governor, a foreign national is being chosen, who has also been investigated by NAB (National Accountability Bureau),” said former finance minister Senator Saleem Mandviwalla, who is associated with the PPP, on Thursday.

At present, no proposal for appointing Bajwa as SBP governor was under consideration, said Shahid Mehmood, spokesman for the finance ministry in an official statement. Bajwa is currently serving as chief executive officer (CEO) at Bank Alfalah.

The statement said reports about Bajwa’s appointment were “mere speculation”. However, the ambiguity remained as the spokesman did not completely rule out the possibility for appointing Bajwa as the central bank governor.

“I cannot completely rule out the possibility about the future,” said Mehmood while responding to a question.



The post of SBP governor fell vacant on April 28 when Ashraf Mehmood Wathra completed his first three-year term and did not get an extension. The government will have to appoint a new head of the central bank within three months of retirement of the last governor, according to the SBP Act 1956.

For the past one week, the market was ripe with rumours that Bajwa may be appointed as the new SBP head and in his place Nauman Insari will be the new CEO of Bank Alfalah. The finance ministry denied this, saying the hiring process is under way and a decision will be taken in due course. Till such time, Riaz Riazuddin would continue to serve as acting governor, the spokesman added.

But the PPP has expressed its reservations about the expected appointment.

“PPP has reservations as Bajwa is very close to an influential business group and has been serving them,” said Mandviwalla. His appointment would compromise the credibility of central bank, he said.

“For the seat of SBP governor, a foreign national is being chosen, who has also been investigated by NAB,” alleged Mandviwalla without disclosing the charges against him.

According to Mandviwalla, Bajwa is an Austrian national and Austria does not allow its citizens to hold another nationality.

Pakistani laws do not prevent dual nationals from being appointed as head of the central bank. In the past, dual nationals have held the post. But Bajwa’s case is different.

Mandviwalla, in his statement, said the PML-N government was appointing its favourites on important posts. He urged the government to appoint someone on merit who was unbiased, non-partisan and neutral.

Bajwa has been the CEO of Bank Alfalah since October 27, 2011. He also serves as president of the Abu Dhabi Group. He has over 30 years of experience in banking both within and outside of Pakistan.

It is not clear whether the government will appoint a banker or an economist as the new SBP chief. Previously, Finance Minister Ishaq Dar has preferred a banker over economist, although Pakistan’s economic situation warrants appointment of an economist.



Pakistan’s economy is facing the challenge of growing current account deficit and dwindling foreign currency reserves that could impact the exchange rate of rupee and increase inflation.

During the week ended June 2, the SBP’s foreign currency reserves fell $1.215 billion in just a week to $15.707 billion. During the week, the SBP made payments of $1.239 billion on account of external debt servicing, which included principal repayment of $750 million against Pakistan’s sovereign bond.

Published in The Express Tribune, June 9^th, 2017.

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