ISLAMABAD: The government has assured the International Monetary Fund that it will bring 70 new accounts of public entities, with an average balance of Rs290 billion, under the Treasury Single Account after the finance ministry confirmed that public entities had parked Rs1 trillion in commercial bank accounts instead of depositing the funds in the TSA,
The development indicates that the IMF is monitoring funds parked outside the TSA framework and pressing authorities to end the long-standing practice of keeping public money outside the government’s central cash management system.
Top official sources told The News Lark on Friday that Pakistan had committed to the IMF that it would continue efforts to consolidate the cash holdings of government institutions.
In a recent parliamentary panel proceedings, Senator Anusha Rahman from the ruling PMLN had raised the issue of not defining the state owned entities (SOEs) in the Public Finance Management Act 2019.
When the Ministry of Finance high-ups were grilled by the senators, the additional secretary, budget conceded that the public entities had parked Rs1 trillion into the accounts of commercial banks instead of depositing the money in the TSA.
On the other hand, the Ministry of Finance has shared with the IMF in writing that Pakistan would move towards consolidation of improved fiscal management. In order to achieve consistency, the government will not conduct sectorisation study but will adopt legal criteria to identify entities that should comply with the TSA rules.
There are 70 new accounts of public entities having an average balance of Rs290 billion that will be brought under the TSA, which already includes 242 accounts with Rs200 billion in balances.
Parliamentarians are furious over the non-implementation of the PFM Act enacted in 2019, and referred to its Section 40C stating that the revenue collection officer shall deposit the collected amount in the Federal Consolidated Fund (FCF) promptly without delay in the prescribed manner under the head of account specified by the Finance Division in consultation with the Accountant General of Accounts.
On the rising debt and its management, the sources said the government will address the increased debt trap risk stemming from elevated gross financing needs and significant sovereign bank nexus.
The government will implement the debt strategy for 2026-28, converting the domestic debt portfolio towards long-term maturity.
“The government will continue to implement a plan to gradually retire domestic debt held by the SBP. It is also making progress in strengthening the institutional arrangements for public debt management,” said the official.
In order to broaden the investors’ base, the government has increased its efforts to enhance investor relations by actively informing current and potential investors about its debt management strategy.
The government, according to the sources, is evaluating potential instruments that cater to investor preferences while carefully considering associated costs and risks.
The government will refrain from issuing any instrument that could expose the government’s debt portfolio to excessive risks. The government is going to finalise plans to reform the retail debt program and is actively exploring digital channels to distribute debt securities more efficiently.
The government will remain committed to conducting a comprehensive study by the end of September 2026 as a new structural benchmark in line with guidance from international institutions to assess the key pillars of the government securities market and to develop a strategic action plan aimed at addressing the identified bottlenecks.