ECC enhances SBP’s powers

 The Express Tribune 

August 15, 2020

The Economic Coordination Committee (ECC) of the cabinet has further empowered the State Bank of Pakistan (SBP), which can now allow resident Pakistani companies overseas investment of up to $10 million.

Earlier, the State Bank could authorise resident Pakistani companies investment of up to $5 million in foreign countries. In case of investment of more than $5 million abroad, the SBP had to seek approval of the ECC.

Considering the case of Eastern Products (Pvt) Limited Pakistan in a meeting held last month, the ECC enhanced powers of the central bank for according approval to equity investment abroad by the resident Pakistani companies.

During discussion, Minister for Planning, Development and Special Initiatives Asad Umar noted that at present the State Bank was authorised to approve equity-based investment of up to $5 million abroad by the resident Pakistani companies. Beyond that ceiling, investment cases were brought to the ECC for consideration and go-ahead.

Umar emphasised that in order to promote ease of doing business, there was a dire need to revise authorisation powers of the central bank and it should be permitted to endorse investment of up to $10 million in foreign countries by Pakistani companies. “The said limit should be reviewed after every five years,” he suggested. Adviser to Prime Minister on Institutional Reforms Dr Ishrat Husain backed the views of the planning and development minister. He recalled that the ECC a long time  ago, on his recommendation, had authorised the State Bank to allow overseas investment of up to $5 million by the resident Pakistani companies, adding that now the ceiling should be revised. The ECC agreed to the proposal.

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