ISLAMABAD: The lingering controversy over hefty salaries, perks, and privileges determined by the respective Boards of regulatory bodies has raised several questions, primarily due to the lack of a uniform mechanism across all such institutions.
An analysis reveals that among the 19 regulatory bodies in Pakistan, remuneration, perks, and privileges are determined differently, depending on the governing laws and internal procedures of each body.
In the case of the State Bank of Pakistan (SBP), Section 14A of the SBP Act, 1956, outlines that the terms and conditions of service, including the remuneration of the governor and deputy governors, are to be determined by the Board of Directors. Leave and official foreign travel for these officeholders are also decided internally, with the Board determining the governor’s leave and the governor determining leave for the deputy governors. Remuneration for external members of the Monetary Policy Committee is similarly determined by the board. To ensure impartiality, the governor and deputy governors are required to recuse themselves from meetings where decisions about their own remuneration are made.
The terms and conditions of appointment for non-executive directors, including their fees, are determined by their appointing authority and must be included in the appointment offer. When deciding remuneration or fees for the governor, deputy governors, non-executive directors, and external members of the Monetary Policy Committee, the Board must consider the average remuneration levels prevalent in Pakistan’s financial sector to ensure the recruitment and retention of qualified professionals. The total consolidated remuneration and fees paid to these officials must be disclosed in the Bank’s annual financial statement. At the most recent meeting of the Senate Standing Committee on Finance and Revenues, Senator Anusha Rahman questioned why boards of various departments and State-Owned Enterprises (SOEs) were allowed to set their own salaries. She announced her intention to introduce legislation in Parliament requiring such departments and SOEs to deposit their funds in the National Bank of Pakistan or the Federal Consolidated Fund. The Securities and Exchange Commission of Pakistan (SECP) is also at the centre of similar scrutiny following a substantial salary increase approved for its top officials. Legal concerns have been raised over whether the SECP Policy Board has the authority to approve changes in the remuneration of the Commission’s Chairman and Commissioners. The SECP, however, has defended its decision, citing Section 4 of the SECP Act, 1997, which states that commissioners, including the chairman, shall be paid such remuneration and allowances as the Commission may determine with the Board’s approval. Despite this, the Auditor General of Pakistan (AGP), in its most recent report, flagged excessive expenditures. The report noted that the SECP had disbursed Rs 226 million in perks and bonuses, alongside an additional Rs 111 million under the category of ‘rest and recreation allowance’ for its staff.
The Policy Board approved the pay increase in November 2024, but made it effective retrospectively from 1 July 2023. A parliamentary source criticised this decision, stating that if the rationale behind the raise was future retention, then backdating it by 16 months appeared unjustifiable and seemed designed to provide financial benefit without a valid policy justification. Furthermore, the decision was not unanimous, as one private-sector member of the Policy Board opposed the raise during the November 2024 meeting.
Other regulatory bodies operate under different frameworks. For example, in the case of PEMRA, the Chairman and members receive emoluments determined by the President of Pakistan, which cannot be altered to their disadvantage during their term of office. In NEPRA’s case, the chairman and members receive remuneration and allowances determined by the Authority with the approval of the federal government. At OGRA, members are paid remuneration determined by the federal government prior to their appointment, which cannot be varied to their disadvantage during their tenure. The director general of the Civil Aviation Authority receives salary and allowances under terms set by the prime minister. For the Pakistan Telecommunication Authority (PTA), members receive salaries and privileges equivalent to an officer in MP-II, while the Chairman receives benefits equivalent to MP-I. This disparity in the governance of remuneration, perks, and allowances continues to fuel debate over transparency, accountability, and the equitable treatment of public funds across Pakistan’s regulatory bodies.