PTBP Web Desk
Pakistan has taken a major step under its Pakistan IMF reforms government accounts consolidation plan by agreeing to close dozens of bank accounts held by ministries and departments. The move is aimed at improving public financial management, consolidating cash resources, and reducing borrowing costs.
Under the agreement with the International Monetary Fund, the government will close 70 non-interest-bearing accounts in the first phase and transfer approximately Rs300 billion into the national treasury. These funds will be moved into a centralized Treasury Single Account (TSA), which is designed to streamline government cash management.
Gradual Shift Toward Treasury Consolidation
Officials revealed that this initiative is part of a broader reform agenda under the IMF program. Previously, around 242 government accounts holding nearly Rs200 billion had already been shifted to the treasury. With the latest move, total consolidated funds are expected to rise significantly.
The government ultimately plans to close all remaining non-savings accounts, with total transfers projected to reach around Rs400 billion. In the second phase, authorities will also target savings accounts maintained by ministries and attached departments.
However, certain autonomous bodies may be exempt from this requirement, particularly those that do not depend on federal budget allocations.
Addressing Long-Standing IMF Concerns
The issue of fragmented public funds has long been flagged by the IMF. According to the lender, government departments often hold idle funds in commercial banks, earning returns, while the state simultaneously borrows at higher interest rates.
Through the Pakistan IMF reforms government accounts consolidation, authorities aim to eliminate this inefficiency. By centralizing funds, the government can reduce its reliance on expensive borrowing and improve fiscal discipline.
At the same time, the Ministry of Finance Pakistan has emphasized the need to maintain a balance between reform and institutional autonomy. Officials have noted that forcing independent organizations to surrender their funds could affect their operational flexibility.
Parliamentary Oversight and Policy Framework
The issue has also drawn attention at the parliamentary level. A Senate committee recently highlighted concerns that nearly Rs1 trillion remains parked in private bank accounts of state-owned entities and regulators instead of being transferred to the federal consolidated fund.
In response, the government is developing a formal framework under the Public Finance Management Act and treasury rules. This framework will outline timelines and procedures for closing accounts and transferring funds.
Debt Management Reforms Underway
Alongside account consolidation, Pakistan is also implementing broader debt management reforms. The government has committed to extending the maturity period of domestic debt to four years and two months by June 2027.
Currently, the average maturity of domestic debt has improved to around three and a half years, compared to approximately two and a half years before the IMF program began. These measures aim to reduce refinancing risks and enhance financial stability.
Additionally, authorities are working to develop the domestic debt market, expand the investor base, and introduce digital channels for issuing government securities more efficiently.
