The International Monetary Fund (IMF) has called on Pakistan to remove the finance secretary from the State Bank of Pakistan’s (SBP) board and fill two long-vacant deputy governor positions in order to reinforce the central bank’s institutional independence, Daily Times reported.

The IMF also suggested changes to the Banking Companies Ordinance of 1962, aiming to divest the federal government of its power to instruct SBP to inspect commercial banks. According to Daily Times, the lender believes these changes would further reduce state influence over financial regulation while enhancing SBP’s autonomy, despite the government being its sole shareholder.

Pakistan previously amended the SBP Act in 2022 under IMF pressure, granting the central bank greater independence and removing the finance secretary’s voting rights on the board of directors. Currently, the SBP board comprises the governor and eight non-executive directors, one from each province, while two of the three sanctioned deputy governor positions remain unfilled. At present, only Saleem Ullah is serving as deputy governor, overseeing finance, inclusion and innovation.

Finance Minister Muhammad Aurangzeb has reiterated that the government has no role in setting interest rates or exchange rates, which are determined independently by the SBP. He added that an IMF review mission is scheduled to visit Pakistan in September to discuss the disbursement of a $1bn loan tranche.