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Governor State Bank Shahid Kardar resigns – Govt accepted resignation

ISLAMABAD (Wednesday, July 13, 2011): Governor State Bank Shahid Kardar resigned amid reports suggesting he had developed serious differences with top state functionaries, Express 24/7 reported on Wednesday.

Federal government has accepted his resignation.
Kardar remained governor of the central bank for the shortest period.He was the 16th governor of state bank, and the sixth to resign from this post.
Kardar’s predecessor Saleem Raza had also resigned after staying in office for 16 months.
Sources said that Yaseen Anwar will be acting governor of SBP.
Updated from print edition (below)
Leaving office: Central bank governor on his way out?
State Bank of Pakistan (SBP) Governor Shahid Hafiz Kardar may be on his way out amid reports suggesting he has developed serious differences with top state functionaries.
His resignation would make him the second governor in two years to have left the prestigious office before completion of the three-year statutory term. His predecessor Syed Salim Raza, a banker, stayed in office for 16 months.
Sources claim he has tendered his resignation but the development was neither confirmed nor denied by the presidency, the finance minister or the SBP.
They added that Kardar had developed serious differences with authorities on certain monetary affairs.
Sustainable economic team
Kardar’s resignation would add to the woes of the PPP-led government which has struggled to bring together a sustainable economic team.
The government has changed four finance ministers, five finance secretaries, four deputy chairmen Planning Commission and now possibly three central bank governors.
Kardar, a chartered accountant by profession, was appointed the 16th governor of SBP, and the third governor during the incumbent Pakistan Peoples Party-led government’s tenure, on September 9, 2010.
His resignation is bound to send negative signals to the reeling market, experts say.
If Kardar resigns, the government will have to appoint his successor within three months, as required under the law. Deputy Governor SBP Dr Yaseen Anwar, sources say, is tipped to be Kardar’s successor for an interim period.
Governor’s shortcomings
Kardar, known as ‘comrade’ in official circles, is reputed to give a tough time to the government during the cabinet and economic coordination committee’s meetings.
His critics, however, say he had started compromising on certain issues.
They add that he has been unable to exert SBP’s independence and made the central bank just another wing of the finance ministry. As evidence, the critics quote his inability to have the SBP amendment act passed in its original shape.
The government subsequently approved a ‘toothless’ act, maintaining the finance ministry’s hold over the SBP.
Chairman Senate standing committee on finance and revenue Senator Ahmad Ali also gave a dissenting note on granting unchecked authority to the finance ministry for borrowing from the central bank at will.  Critics add that he has been unable control inflation and stimulate growth – the economy grew by 2.4 per cent and inflation stood at 13.2 per cent during the last financial year.
Kardar has previously served as minister for finance, planning and development, excise and taxation and industries and mineral development under government of Punjab between November 1999 and January 2001.
Despite repeated attempts, neither the president’s spokesperson Farhatullah Babar nor Finance Minister Dr Abdul Hafeez Shaikh responded to reports of Kardar’s resignation.
(Published in “Express Tribune” on July 13, 2011)

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