Restricting lending to government: National Assembly adopts SBP bill.

Byline: NAVEED BUTT

National Assembly on Thursday passed ''The State Bank of Pakistan (Amendment) Bill, 2010'' restricting the SBP not to grant direct or indirect credit to the federal and provincial governments or to any other public agency or state-owned entity, with the exception of intra-day credits to secure the smooth functioning of the payment system.

"Such intra-day credits shall be fully repaid before the end of the same day." However, the restrictions of lending shall not apply to publicly-owned banks and other financial institutions, which shall be given the same treatment as privately-owned banks and other financial institutions. The Monetary and Fiscal Policies Co-ordination Board was also replaced with the current Monetary Policy Committee statutory status, with external experts to be appointed by the Federal Government.

The Central Board will be represented by two members on the Committee which will be responsible to formulate, decide and implement the monetary policy and …