Govt defers NBP privatisation

On Monday, the government postponed the decision to privatize the National Bank of Pakistan (NBP) due to legal issues. This decision defies a previous pledge to the International Monetary Fund (IMF) to abolish the special status of seven government-owned enterprises, including the NBP.


Last month, Pakistan assured the IMF that it will rescind the seven enterprises’ special status. However, on Monday, the government used the same unique status as a basis for keeping the NBP in the public sector. Senator Muhammad Aurangzeb, the Finance Minister, presided over a meeting of the Cabinet Committee on State-Owned Enterprises.

“The Cabinet Committee approved that the National Bank of Pakistan, being a part of the Sovereign Welfare Fund, is exempted from the SOE Act 2003 and hence not required to be categorised,” reported the Ministry of Finance.

The committee also resolved to keep the EXIM Bank in the public sector by classifying it as an essential State-Owned Enterprise (SOE). According to the Pakistan Sovereign Wealth Fund Act, enterprises under its administrative supervision are excluded from the SOE Act of 2023, which was enacted on World Bank instructions to improve governance and financial controls in public-sector companies. However, Section 50 of the Pakistan Sovereign Wealth Fund Act exempts its administered enterprises from SOE legislation.


Last month, in order to secure a staff-level agreement with the IMF, the government agreed to change the Pakistan Sovereign Wealth Act to remove the NBP and six other profitable enterprises from their special status. The PSWF Act was designed to transfer shares of these firms in the first phase and later sell them overseas to generate revenue. These companies include the Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL), Mari Petroleum, National Bank of Pakistan (NBP), Pakistan Development Fund, Government Holdings (Private) Limited, and Neelum-Jhelum Hydropower Company.

As a major concession, Pakistan agreed to remove Section 50 from the PSWF Act by the end of December, bringing these seven firms under the scope of the SOE Act 2023. The amended law would make it clear that all government-owned entities are subject to the SOE Act and SOE Policy. Pakistan has also agreed to modifying all relevant portions of the law pertaining to the wealth fund’s objectives, businesses, governance, revenue sources, fund withdrawals, and public asset management.

Some CCoSOE members advocated for the privatisation of the NBP, but the topic was postponed due to legal impediments. The CCoSOEs are presently categorizing the remaining 61 firms, with non-essential and non-strategic companies earmarked for privatization. The government’s privatisation drive is proceeding slowly, with House Building Finance Company and Pakistan International Airlines falling behind schedule. The loss-making power sector has been mainly pushed to the second phase of privatisation, which is expected to be finished in three years.

Last week, the Cabinet Committee on Privatisation (CCoP) postponed a decision on adding 16 new government-owned firms on the active privatisation list. The CCoP reaffirmed its three-month-old decision to privatise 24 companies, many of which had been on the active privatisation list for years.

The Cabinet Committee on SOEs approved the merger of the National Security Printing Company (NSPC) and the Pakistan Security Printing Corporation (PSPC). The Ministry of Finance and the SBP have been asked to finish the paperwork and deliver an implementation plan to the cabinet committee, according to the finance ministry. The NSPC was formed from the PSPC, resulting in operational challenges while printing security documents. It was also agreed that the finance ministry will sell its stake in the NSPC to the central bank.


The CCoSOEs opted to privatize Zarai Taraqiati Bank Limited (ZTBL), despite the fact that it was previously on the CCoP’s authorized privatisation list. The cabinet committee was notified that the First Women Bank Limited and the House Building Finance Company were nearing the end of their privatization process. The Finance Ministry is also in the process of liquidating the Industrial Development Bank Limited and closing the SME Bank.

The finance ministry has direct authority over approximately nine enterprises, with three or four set for privatisation. However, the government has yet to make the boards of the ZTBL and Exim Bank operational, raising concerns about its effectiveness.