IMF Executive Board expected to approve the IMF loan program in September: Finance Minister Muhammad Aurangzeb

ISLAMABAD, August 21 (SABAH): The Senate Standing Committee on Finance and Revenue convened on Wednesday under the chairmanship of Senator Saleem Mandviwalla at the Parliament House. Federal Minister for Finance and Revenue, Muhammad Aurangzeb, was also present and provided an update on the IMF loan program.

He indicated that the IMF Executive Board is expected to approve the program in September and expressed optimism that negotiations are progressing positively.

The meeting also included Secretary Finance, the Governor of the State Bank, and the Chairman of the FBR. The Chairman of the FBR gave an in-camera briefing on the officers appointed as OSD over the past two years. Additionally, an in-camera session addressed measures by State Bank officials to prevent money laundering disguised as solar panel imports.

The Committee intended to review the Deposit Protection Corporation Amendment Bill 2024, which is part of the benchmarks set by the IMF. Finance Minister Aurangzeb stated that the IMF has set a deadline of October 2024 for the legislation. However, Committee member Farooq Naek criticized the bill as unconstitutional, asserting that it was introduced during the caretaker period and accusing the Ministry of Law and Justice of misleading the Committee. Chairman Mandviwalla clarified that the bill was introduced by the previous caretaker government in January and has not yet been passed. The Committee debated whether the newly elected government should reintroduce the bill. Senator Farooq Hamid Naek condemned the caretaker setup as unconstitutional, noting its rare use outside of Bangladesh. After consensus of all the committee members the Committee directed that the bill be reintroduced again in the National Assembly on Monday.

The Committee also reviewed issues regarding digital and plastic currency. Governor State Bank Jameel Ahmed reported that new currency notes are being developed and that the life span of plastic notes is under evaluation. It was briefed that state bank will internally finalise the prerequisites of introducing new currency notes by December Shahzaib Durrani supported the introduction of plastic currency, while Governor Ahmed stated that plastic currency will be tested and issued based on public acceptance.

Senator Mohsin Aziz criticized the 5,000-rupee note as a source of corruption, claiming it is hoarded in unaccounted spaces. The discussion highlighted that although the note was initially valuable, its worth has diminished over time. Governor state Bank assured that new currency notes will include enhanced security features.

The meeting also addressed the issue of 800 plus consignments of light aliphatic hydrocarbon solvent (HS CODE 2710.1250) and the problems faced by the FPCCI at MCC Appraisement Quetta. It was reported that, after extensive deliberation, the Department of Explosives has ordered the release of the tankers upon payment of a penalty of 300,000 per tanker. The issue therefore stood resolved.

Regarding the inclusion of provincial representatives on the EXIM Bank Board, it was noted that the State-Owned Enterprise Governance and Operation Act 2023 requires the majority of directors to be independent. The federal government may appoint qualified individuals as independent directors, meeting the State Bank of Pakistan’s fit and proper criteria.

On the Export Finance Scheme (EFS), it was reported that the transition to EXIM Bank is progressing smoothly and is expected to be completed between FY 2024-28, following the successful conclusion of FY 2023-24. The SBP is gradually phasing out bank limits and advising EXIM Bank on limit allocations to ensure continuity of the export scheme.

The meeting was attended by Senators Farooq Hamid Naek, Sherry Rehman, Syed Shibli Faraz, Mohsin Aziz, Shahzaib Durrani, and Senator Ahmed Khan. Governor of the State Bank, Federal Minister for Finance Muhammad Aurangzeb and other senior officials from relevant departments was also in attendance.