ISLAMABAD: The International Monetary Fund (IMF) has urged Pakistan to ensure that all public sector entities deposit their funds into a Treasury Single Account (TSA) instead of keeping them in commercial bank accounts, sources confirmed on Friday.
According to officials, the IMF has expressed concern that government entities have collectively parked over Rs1 trillion in commercial banks rather than transferring these funds to the TSA. The Fund has advised the federal government to reduce its reliance on borrowing and instead utilize idle funds held by public institutions by consolidating them into a single treasury account. It has also emphasized the need for the government to maintain full control over public finances to ensure transparency and fiscal discipline.
Sources revealed that many public entities are keeping around Rs1,000 billion in private bank accounts, earning profits, while the government borrows from the same banks at significantly higher interest rates to finance its fiscal deficit. The IMF has called for bringing all public funds under a unified system, noting that this would improve cash management and reduce unnecessary borrowing. Under the Public Finance Management Act 2019, all public revenues are required to be deposited into the Federal Consolidated Fund through a Treasury Single Account maintained at the State Bank of Pakistan. However, weak oversight by the Ministry of Finance has hindered full implementation.
According to sources, Pakistan has assured the IMF in writing that it will transfer public funds into the TSA framework. Sources added that 242 accounts have already been consolidated, contributing approximately Rs200 billion to the national treasury. The Fund has also set a target to include accounts of 70 additional public entities into the system. Around Rs290 billion linked to these entities is expected to be brought under the TSA. The move is part of broader fiscal reforms aimed at improving financial transparency and aligning Pakistan’s public financial management system with IMF benchmarks.
The IMF’s push comes as Pakistan seeks to stabilize its economy under a $7 billion loan program. The TSA is seen as a critical tool to enhance cash management, reduce borrowing costs, and strengthen fiscal discipline. Analysts say that full implementation could save the government billions in interest payments annually.
Source: ARY News