Islamabad: The State Bank of Pakistan (SBP), the central bank of the nation, has refused to abide by the request of the ruling government under Prime Minister Imran Khan to open an account for ‘Afghanistan Relief Fund’ amid fear of sanctions by the Financial Action Task Force (FATF).
The Pakistan government recently announced that it would be opening an account titled Afghanistan Relief Fund to keep a record of donations from Pakistan and abroad to help the people of Afghanistan meet their humanitarian needs.
Following the announcement, the Finance Ministry had directed the State Bank of Pakistan to open the account with immediate effect for the Afghanistan Relief Fund.
However, the SBP has now refused to open the account, requesting the government to review its decision. As per sources, the SBP has expressed fear of getting sanctioned by the FATF if the Afghanistan Relief Fund account is opened.
“The central bank has returned the government’s request to open the relief fund with the advice that the decision might be reviewed in light of Pakistan’s commitments under international covenant and the FATF action plan,” a source revealed.
“The issue of opening the Afghanistan Relief Fund account is being examined to ensure that Pakistan fully complies with its international commitments,” said Finance Secretary Hamid Yaqoob.
The refusal by the central bank to cater to the federal government’s instruction has raised many questions over the authority the government has over its own central bank, especially in light of the criticism by opposition political parties, who now call the SBP a Pakistani branch of the International Monetary Fund (IMF), accusing the government of making the country’s finances dependent on the dictations of the IMF.
The issue has also put forward a challenge to the country’s foreign office, as it works towards getting commitments from the international community to tackle the foreseen devastations due to humanitarian crisis in Afghanistan.
Imran Khan, while talking about the situation in Afghanistan, stated, “Unless action is taken immediately, Afghanistan is heading to chaos.”
While the situation in Afghanistan continues to move towards a humanitarian disaster, the international community is still not ready to recognise the Taliban-led government in the country. However, Pakistan has vowed to come forward with its contribution in humanitarian aid, aimed at preventing the worsening humanitarian crisis.
Pakistan has worked up its relevance in the future development and humanitarian aid through extended engagements with regional neighbours and global powers.
However, with SBP’s refusal to comply with the federal government’s request, serious concerns are raised over Islamabad’s capacity to play part in Afghanistan’s development and aid, due to its struggle to complete the action plan of FATF and also for being under the IMF programme.
Pertinent to mention that Pakistan remains on the FATF grey list since January 2019. The FATF, during the last plenary meeting, stated that Pakistan did not meet the strategically important list of terror outfits and persons.
Pakistan currently has completed 26 out of the 27-point action plan given by the FATF. Islamabad hopes to complete the last point of the plan before the next plenary meeting of the FATF, scheduled to be held in February.