{"id":1524,"date":"2024-11-04T06:15:43","date_gmt":"2024-11-04T06:15:43","guid":{"rendered":"https:\/\/pkfin.kotenterprises.dev\/?p=1524"},"modified":"2025-01-16T16:02:44","modified_gmt":"2025-01-16T16:02:44","slug":"govt-proposes-changes-to-sbp-act","status":"publish","type":"post","link":"https:\/\/pkfin.kotenterprises.dev\/?p=1524","title":{"rendered":"Govt Proposes Changes to SBP Act"},"content":{"rendered":"\r\n\r\n\r\n

ISLAMABAD<\/strong> \u2014 In a significant policy shift, the federal government has proposed a series of amendments to the State Bank of Pakistan (SBP)<\/a> Act, which could pave the way for dual nationals to hold key positions within the central bank and introduce the legal use of digital currencies in Pakistan. The proposed changes, if approved by the federal cabinet and subsequently by Parliament, could mark a landmark shift for Pakistan, potentially making cryptocurrencies and digital currencies like Bitcoin legal tender.<\/p>\r\n\r\n\r\n\r\n

Dual Nationals Eligible for Top SBP Roles<\/h2>\r\n\r\n\r\n\r\n

The Ministry of Finance has proposed approximately a dozen amendments to the SBP Act, vetted by the Ministry of Law, and submitted a summary for cabinet approval, signaling a new approach to financial policy. Among the key amendments is a provision to allow dual nationals to serve as SBP governor, deputy governors, and non-executive directors on the board.<\/p>\r\n\r\n\r\n\r\n

This restriction was originally introduced in January 2022 as part of broader IMF-influenced amendments to the SBP Act. Although the IMF did not directly recommend the restriction on dual nationals, it was implemented during reforms favored by the former governor.<\/p>\r\n\r\n\r\n\r\n

One proposed amendment would remove the phrase \u201chaving dual nationality\u201d from Section 13, which currently disqualifies dual nationals from serving in senior SBP positions. This move is seen as an effort to address the limited talent pool for senior roles, with Finance Minister Muhammad Aurangzeb previously suggesting the need for flexibility on this requirement.<\/p>\r\n\r\n\r\n\r\n

The timing of this amendment is significant. One of SBP\u2019s deputy governors, Dr. Inayat Husain, a dual national, is set to complete his term on November 8. Dr. Husain\u2019s expertise and substantial role within the SBP have reportedly made him a strong candidate for reappointment for a new five-year term.<\/p>\r\n\r\n\r\n\r\n

Introducing Digital Currency as Legal Tender<\/h2>\r\n\r\n\r\n\r\n

The amendments also introduce provisions for digital currency in the SBP Act for the first time. The SBP, which has previously issued advisories against the use of virtual currencies such as Bitcoin and Litecoin, now appears poised to embrace digital currency as part of its formal mandate.<\/p>\r\n\r\n\r\n\r\n

According to the proposed amendments, digital currency is defined as \u201ca digital form of currency issued by the bank under Section 24 as legal tender under Section 25.\u201d This change would give the SBP the authority to issue and regulate digital currency in Pakistan, whether in physical or digital form.<\/p>\r\n\r\n\r\n\r\n

To facilitate this shift, the SBP plans to establish a subsidiary to oversee the development and operation of digital payment systems. Further amendments to Section 17 authorize the SBP to engage in \u201ccentral bank digital currency\u201d business, reflecting a more proactive stance on digital financial technology.<\/p>\r\n\r\n\r\n\r\n

Historically, the SBP has warned against virtual currencies due to concerns over anonymity and potential for misuse. However, the new amendments propose penalties for unauthorized issuance of digital currency, with violators subject to fines amounting to double the illegal issuance value.<\/p>\r\n\r\n\r\n\r\n

Expanding SBP Board\u2019s Powers<\/h2>\r\n\r\n\r\n\r\n

The proposed amendments would also broaden the SBP board\u2019s authority in financial reporting. A change to Section 9A would empower the board to approve the SBP\u2019s annual report, half-yearly report, financial stability report, and other critical economic updates. Additionally, amendments to Section 9B would streamline board governance by allowing the chairperson or three non-executive directors, rather than any \u201cmember,\u201d to call a board meeting.<\/p>\r\n\r\n\r\n\r\n

Next Steps<\/h2>\r\n\r\n\r\n\r\n

These amendments signify a strategic shift in Pakistan\u2019s financial policy landscape, reflecting the government\u2019s intent to modernize the SBP\u2019s role and align with emerging global digital finance trends. The proposed changes await federal cabinet approval, after which they will be presented to Parliament for final ratification.<\/p>\r\n","protected":false},"excerpt":{"rendered":"

ISLAMABAD — In a significant policy shift, the federal government has proposed a series of amendments to the State Bank of Pakistan (SBP) Act, which could pave the way for dual nationals to hold key positions within the central bank and introduce the legal use of digital currencies in Pakistan. The proposed changes, if approved […]<\/p>\n","protected":false},"author":1,"featured_media":1475,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_FSMCFIC_featured_image_caption":"","_FSMCFIC_featured_image_nocaption":"","_FSMCFIC_featured_image_hide":"","footnotes":""},"categories":[8],"tags":[919,402,14,59,918],"class_list":["post","format-standard"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t