The government has decided to appoint a new deputy governor of the central bank in place of Dr Murtaza Syed, as it has again violated an Act of parliament by not filling a vacant position of central bank director within one month.
The three-year tenure of Murtaza Syed – once a favourite candidate for the post of State Bank of Pakistan (SBP) governor – is ending on January 26. But this will be his last week at the central bank as he is proceeding on leave.
Former SBP governor Dr Reza Baqir had brought him from the International Monetary Fund (IMF) to serve at the central bank. He worked with the IMF for 16 years before joining the SBP three years ago.
He also served as the acting SBP governor for about three months due to delay in reaching a political consensus on the appointment of the new governor.
“I am not going back to the IMF,” Murtaza told The Express Tribune on Monday.
At the time of appointment of the governor and deputy governor over three years ago, there had been criticism of bringing people from abroad. However, Murtaza proved his mettle during his three-year stay at the SBP.
After he could not muster enough support for extension in services, Baqir has now joined the Mossavar-Rahmani Centre for Business and Government, Harvard Kennedy School.
In August, Murtaza was one of the top three candidates being considered for thr post of SBP governor. However, the government preferred Jameel Ahmad as some in the Pakistan Muslim League-Nawaz objected to the political background of one of Murtaza's relatives.
The government has not yet received a panel for the post of deputy governor, although the names of Dr Saeed Ahmed and Ashraf Khan - both of them were also being considered for the post of governor six months ago - were being circulated. Ahmed's three-year tenure as a senior advisor to the IMF executive director ended last week.
The amended SBP Act states that the deputy governors shall be appointed by the federal government after consultation between the minister of finance that the governor, from amongst a panel of three candidates recommended by the governor for each vacant position, in order of merit
"In the event of a vacany occuring amongst the appointed governor, deputy governors, non-executive directors and the external members of the Monetary Policy Committee, an appointment referred shall be finalised within a period not exceeding thirty days on the occurrence of such vacancy,” read sub-section 4 of Section 11.
However, the federal government has violated the SBP Act thrice in the past eight months, which had been amended on the demand of the IMF and the then SBP management.
The government had appointed Tariq Pasha as the SBP director in July this year but on October 27 he was appointed special assistant to the prime minister on revenue. The law required the government to fill the post by November 26. However, it has violated the law for two months.
The government filled the post only 10 days ago when President Arif Alvi approved the appointment of Muhammad Ali Latif as the non-executive director of the SBP.
Nadeem Hussain, another director of the SBP, resigned on December 10 due to the conflict of interest between his stake in a firm that was competing to get a digital banking licence and his position on the board.
Hussain has an equity stake in Planet N Private Limited, which applied for the digital banking licence from the State Bank. Planet N and Pak-Kuwait Investment Company have formed a consortium that sought the licence. This position also remains vacant.
An official of the finance ministry said that so far no appointment of the second director had been made.
The central bank’s website is still showing Tariq Pasha and Nadeem Hussain as the directors.
The lack of respect for the law eventually leads to the weakening of state institutions and bad governance. The federal government’s attitude has remained callous, which allows institutions like the IMF and the World Bank to force their will on Pakistan.
The central bank is also not adhering to the rotation policy. Some executive directors are serving beyond the mandatory limit of three years. The new SBP governor has not yet rolled out the restructuring of the central bank that he envisages to do to run the bank more efficiently.
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