Finance Minister Shaukat Tarin said on Monday that the government will retain control over the State Bank of Pakistan (SBP), as it seeks to pass the SBP Amendment Bill, 2021 from parliament, a statement that comes amid widespread criticism that the move is aimed at limiting powers of the state over the central bank.

Briefing a meeting of the National Assembly's Standing Committee on Finance, chaired by Faiz Ullah Kamoka, Tarin said that the impression that it will curtail powers of the government is not correct.

6th review: IMF accepts Pakistan's request to reschedule, says finance ministry

"The government will nominate names of the board of directors of the central bank and will also have the power to approve their appointment," said Tarin during a heated standing committee session in which he traded barbs with the opposition leaders including Pakistan Muslim League-Nawaz (PML-N) Ahsan Iqbal.

The finance minister informed the committee that the International Monetary Fund (IMF) has told the government not to borrow from the central bank.

"The government has borrowed no loans from the SBP for the last two and a half years," he said.

“Instead of State Bank, the government would borrow from commercial banks."

The State Bank of Pakistan (SBP) Amendment Bill, 2021 alongside the Finance (supplementary) Bill are prior conditions needed for the sixth review of the $6 billion EFF to get cleared by the International Monetary Fund’s (IMF) executive board.

Completion of the review would make available SDR 750 million (about $1,059 million), bringing total disbursements under the EFF to about $3,027 million.

The IMF approval is crucial for Pakistan's economy, which battles a rise in current account deficit amid widening of the import bill. Experts say that the IMF approval would pave way for Pakistan to approach other international lenders i.e. the World Bank and Asian Development Bank (ADB) to meet its funding needs.

IMF Board to meet on 12th, agenda includes Pakistan

Earlier on Monday, Pakistan's finance ministry confirmed that the IMF has agreed to its request to reschedule the sixth review of the $6-billion Extended Fund Facility (EFF), after earlier stating that it would be held on January 12.

Pakistan and the IMF reached a staff-level agreement on policies and reforms needed to complete the sixth review under the $6 billion EFF in November last year.