The International Monetary Fund has urged Pakistan to ensure that all public sector entities transfer their funds into a Treasury Single Account (TSA), raising concerns over large sums currently held in commercial banks, sources said.
According to officials familiar with the discussions, the Fund noted that government entities have parked more than Rs1 trillion in commercial bank accounts instead of depositing these funds into the centralised treasury system.
The IMF has advised the government to reduce its reliance on borrowing by utilising idle funds held by public institutions, stressing that consolidation into a single account would strengthen fiscal discipline and improve transparency.
Sources said several public entities are maintaining approximately Rs1,000 billion in private bank accounts, earning profits, while the government simultaneously borrows from the same banks at significantly higher interest rates to bridge its fiscal deficit.
The Fund has called for bringing all such resources under a unified framework, observing that the move would enhance cash management and help cut avoidable 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, officials acknowledged that weak oversight by the finance ministry has slowed full implementation of the system.
Pakistan has given written assurances to the IMF that it will transfer public funds into the TSA framework, sources added.
So far, around 242 accounts have been consolidated, bringing nearly Rs200 billion into the national treasury. The Fund has further set a target to incorporate accounts of 70 additional public entities, with an estimated Rs290 billion expected to be shifted to the TSA.
Officials said the measure forms part of broader fiscal reforms aimed at improving financial transparency and aligning Pakistan’s public financial management practices with IMF requirements.
