State Bank Governor Kardar resigns?
By Shahid Iqbal
KARACHI: Shahid Kardar is reported to have resigned and the SBP Governor’s long silence and now his unwillingness to issue a denial appeared to add substance to ‘unconfirmed reports’ about his resignation.
However, SBP’s chief spokesman Syed Wasimuddin expressed ignorance about the resignation.
Mr Kardar himself could not be contacted.
According to banking sources, the governor has resigned but it is not supposed to be officially announced.
The SBP governor who is appointed by the president submits his resignation to him. But neither the Presidency nor the State Bank said a word about the resignation.
The sources said Mr Kardar had held no meeting with President Asif Ali Zardari over the past two days and no such meeting was scheduled for Thursday.
The State Bank said it could confirm the resignation only if a government notification was issued and so far there was no such notification.
According to a knowledgeable banking source, Mr Kardar resigned after a meeting with the president last week.
Reports abut the resignation surprised the financial sector and analysts are of the opinion that it may affect the continuity of banking policies.
But Summit Bank President and CEO Hussain Lavai said policies relating the financial sector would remain unchanged.
The resignation of former SBP governor Salim Raza last year also came as a surprise because he quit the office only two days before the announcement of budget for 2010-11. In his case it was the age factor; he was 65, the age limit for SBP governor. He remained governor from January 2, 2009, to June 2 last year.
The reason for Mr Kardar’s resignation remained a mystery for the financial sector as well as other stakeholders.
According to the sources, differences developed between the finance ministry and State Bank when the former in its budget paper said that the State Bank’s tight monetary policy had become counter-productive for economy.
The State Bank has been critical of government’s huge borrowings from it as well as from commercial banks. While borrowings from the State Bank create inflation these from commercial banks leave no money for the private sector.
Commercial banks are investing 80 per cent of their money into government papers which not only minimises options for the private sector but also increases lending rates.
Source: Dawn
Date:7/14/2011
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